“our desire to surpass superior performance and energy ... · “our desire to surpass superior...

“Our desire to surpass superior performance

is a major source of strength both for our

staff and the bank as it generates passion

and energy which fuels growth and

helps us sustain our brand equity

over the short and long term.”

“Our desire to surpass superior performance

is a major source of strength both for our

staff and the bank as it generates passion

and energy which fuels growth and

helps us sustain our brand equity

over the short and long term.”

ZENITH

Score Card 2

Corporate Information 3

Financial Highlight 4

Results at a Glance 7

Corporate Profile 8

Corporate Strategy 10

Notice of Annual General Meeting 11

Excelling Through Excellent Service Delivery 13

Chief Executive’s Review 16

Chairman’s Statement 17

Corporate Social Responsibility 22

Board of Directors 24

Executive Management 26

Corporate Governance 27

Risk Management and Control 30

Directors’ Report 35

Report of the Audit Committee 38

Auditors’ Report 39

Statement of Accounting Policies 41

Profit and Loss Account 44

Balance Sheet 45

Statement of Cash Flows 46

Notes to the Financial Statements 47

Statement of Value Added 69

Four Year Group Financial Summary 71

Five Year Financial Summary 72

11group annual report & accounts, 2008group annual report & accounts, 2008

CONTENTS

SCORECARD

Best Global Best Global Bank In Bank In AfricaAfrica

2008

2008

Best BankIn NigeriaBest BankIn Nigeria

2008

Award for Excellence

Bank ofThe Year

Bank ofThe Year

MostCustomer-Focused

Bank

2008KPMG

Africa’s Bank

of The Year

20072007Quoted

Companyof The Year

QuotedCompany

of The Year

2007Nigerian Stock Exchange

(NSE)

Triple ARating

Agusto & Co(1999 - 2007)

Best Global Bank in AfricaAfrican Banker Awards 2008 •

Best Bank in Nigeria (2008)Euromoney •

Bank of the year, 2008Corporate Citizen of the Year, 2008

CEO of the Year, 2008This Day Award of Excellence •

Best Bank in ICT (2008)Best Bank in Export Finance (2008)

Vanguard Bankers’ Award •

Most Customer-Focused Bank (2008)KPMG •

Africa’s Bank of the Year (2007)Africa Investor •

Quoted Company of the Year (2007)Nigerian Stock Exchange (NSE) •

Most Corporate Socially Responsible Bank in Africa (2007)

African Banker •

Fitch Ratings (AA-) 2007“The ratings reflect adequate levels of capitalisation and the potential that capital levels will be further enhanced”

Standard and Poor’s (BB-) 2007“The stable outlook balances the bank’s ability to benefit, in terms of size, profitability, from strong macroeconomic growth”

Agusto & Co. Aaa Rating (1999-2007)Impeccable Financial Condition“We believe Zenith Bank is a financial institution of impeccable financial condition and overwhelming capacity to meet obligations as and when they fall due.”

RATINGSAWARDS

2008

22 group annual report & accounts, 2008group annual report & accounts, 2008

CORPORATE INFORMATION

BOARD OF DIRECTORS

COMPANY SECRETARY

AUDITORS

CORRESPONDENT BANKS

Macaulay Pepple ChairmanJim Ovia Group Managing Director /Chief ExecutiveGodwin Emefiele Deputy Managing DirectorChief E. M. Egwuenu DirectorSir S.P.O. Fortune Ebie DirectorProf. L.F.O. Obika DirectorSir Steven Omojafor DirectorBabatunde Adejuwon DirectorAlhaji Baba Tela Director (Appointed 17 July, 2007)Peter Amangbo Executive DirectorElias Igbinakenzua Executive DirectorApollos lkpobe Executive DirectorAndy Ojei Executive DirectorUdom Emmanuel Executive Director

Michael O. Otu

PriceWaterHouse Coopers(Chartered Accountants)

Australia and New Zealand Bank HSBC Bank Plc South Africa Commerzbank Ag Citibank

40, Bank Street, Canary Wharf Corporate, Investments Financial Institutions (ZFI) Citibank London

London E14 5EJ Banking & Markets Commerzebank AG Canary Square

2, Exchange Square 60261 Frankfurt am Main Canary Wharf

85, Maude Street Sandown, London E14 5LB

Sandton 2196 P.M.B X785434 England

Sandton 2146, South Africa

Citibank N.Y.

111 Wall Street

N.Y. 10043

New York

Deutsche Bank Fortis Bank BNP Paribas PJ Morgan Chase Bank London

1, Appold Street, Broad Gate Camomile Court BFI Energy & Commodities 9, Thomas More Street

London EC2A 2HE 23 Camomile Street, London Export Project, Trinity Tower

EC3A 7PP 21, Place du Marche St. London E1W 1YT, UK

Honore

75031 Paris Cedex 01

JP Morgan Chase Bank New York

1111, Polaris Parkway,

Columbus

Ohio 43240 USA

Head OfficeZenith Heights, Plot 87, Ajose Adeogun Street, Victoria Island, Lagos. Tel: 2703132-34, 01-2703136-42, 4618301, 4618321 | Fax: 01-2618212

[email protected] www.zenithbank.com


GROUP FINANCIAL HIGHLIGHT


7.14

11.62

18.78

51.99

-

10.00

20.00

30.00

40.00

50.00

60.00

2005 2006 2007 2008

2008

9.19

15.59

25.68

56.12

-

10.00

20.00

30.00

40.00

50.00

60.00

2005 2006 2007

42.10

100.64 114.59

2005 2006 2007 2008

344.35

35.31

60.00

94.88

208.29

-

50.00

100.00

150.00

200.00

250.00

2005 2006 2007 2008

Gross Earnings (Group) (N'b) Profit Before Tax (Group) (N'b)

Profit After Tax (Group) (N'b)

233.04

393.31

1,185.89

-

200.00

400.00

600.00

800.00

1,000.00

1,200.00

2005 2006 2008

Total Deposits (Group) (N'b)

Shareholder’s Fund (Group) (N'b)

371.01

776.03

1,271.08

-

500.00

1,000.00

1,500.00

2,000.00

2,500.00

3,000.00

2005 2006 2007 2008

Total Assets + Contingents (Group) (N'b)

634.49

2007

2,512.13

-

70.00

140.00

210.00

280.00

350.00

BANK FINANCIAL HIGHLIGHT


2004

131.10

1,161.48

Total Deposits (Bank) (N'b)

2004 2005 2006 2007 2008

15.67 37.79

100.40 112.83

338.48

Shareholder’s Fund (Bank) (N'b)

2004 2005 2006 2007 2008

215.23

759.97

1,178.39

2,384.69

373.89

Total Assets + Contingents (Bank) (N'b)

23.9334.91

58.22

89.19

190.08

-

50.00

100.00

150.00

200.00

2004 2005 2006 2007 2008

Gross Earnings (Bank) (N'b)

6.409.16

15.15

23.29

48.94

-

10.00

20.00

30.00

40.00

50.00

2004 2005 2006 2007 2008

Profit Before Tax (Bank) (N'b)

5.197.16

11.49

17.51

46.52

-

10.00

20.00

30.00

40.00

50.00

2004 2005 2006 2007 2008

Profit After Tax (Bank) (N'b)

2005

233.41

2006

392.86

2007

568.01

2008-

300.00

600.00

900.00

1,200.00

70.00

140.00

210.00

280.00

350.00

-

500.00

1,000.00

1,500.00

2,000.00

2,500.00

-


Group Bank

Gross Earnings

Profit Before Tax

Total Deposit

Shareholders’ Fund

Total Assets Plus Contingents

120% 113%

119% 110%

87% 104%

198% 200%

98% 102%

FINANCIAL HIGHLIGHT


2008

N’000

208,293,781

56,118,708

51,992,239

445,837,390

4,677,569

1,185,892,673

346,617,643

2,512,129,437

2007 VAR

N’000 %

Profit & Loss

Gross Earnings 94,880,113 120%

Profit Before Taxation 25,676,331 119%

Profit After Taxation 18,779,804 177%

Balance Sheet

Loans & Advances 288,111,826 55%

Advance Under Finance

Lease 2,444,566 91%

Deposit Liabilities 634,492,524 87%

Shareholders’ Fund 116,454,656 198%

Total Assets plus

Contingents 1,271,080,593 98%

RESULTS AT A GLANCE

GROUP BANK

2008

N’000

190,075,034

48,939,945

46,524,991

413,731,491

3,890,435

1,161,475,513

338,484,138

2,384,688,589

2007 VAR

N’000 %

89,193,780 113%

23,288,828 110%

17,509,145 166%

218,305,419 90%

2,444,566 59%

568,012,091 104%

112,833,323 200%

1,178,385,709 102%


CORPORATE INFORMATION

SERVICE EXCELLENCE

Zenith Bank Plc is one of the biggest and most

profitable banks in Nigeria. The bank was established

in May 1990 and started operations in July same year as

a commercial bank. It became a public limited company

on June 17, 2004 and was listed on the Nigerian Stock

Exchange on October 21, 2004 following a highly

successful Initial Public Offering (IPO). The bank

presently has a shareholder base of over one million, an

indication of the strength of the Zenith brand.

Its head office is located at 87, Ajose Adeogun Street,

Victoria Island, Lagos, Nigeria. With over four hundred

(400) branches and business offices nationwide Zenith

Bank has presence in all the state capitals, the Federal

Capital Territory (FCT) and major towns and

metropolitan centres in Nigeria. The bank’s expansion

is not limited to Nigeria as Zenith became the first

Nigerian bank in 25 years to be licensed by the

Financial Services Authority (FSA) in the UK for the

commencement of banking operations by Zenith Bank

(UK) Limited in April, 2007. This is in addition to its

presence in Ghana, Zenith Bank (Ghana) Limited, Sierra

Leone, Zenith Bank (Sierra Leone) Limited and a

representative office in Johannesburg, South Africa.

At Zenith Bank, excellent service delivery and

development of superior asset quality, strong capital

base, professionalism and corporate governance are

abiding principles. The bank maintains sound

corporate governance culture in line with global best

practices. The bank’s customer-specific approach to

customer service consistently reinforces its value

creation processes towards assisting customers in

their goals. Zenith Bank maintains one of the best

assets qualities in the banking industry as evident in

the low ratio of non-performing loans to total loans of

1.7%. The impressive performance over the years has

earned Zenith Bank excellent ratings from local and

international agencies. Standard and Poor’s currently

rates the bank BB-, which is the highest ever assigned

to Nigerian banks. Also, Fitch Ratings currently rates

Zenith Bank AA- (National) while Agusto & Co.,

Nigeria’s foremost rating agency, has for the ninth

consecutive year rated Zenith Bank Triple Aaa, saying

‘’…the bank is a financial institution of impeccable

financial condition and overwhelming capacity to meet

obligations as and when they fall due’’.

Zenith Bank continues to deliver strong performance

over the years with remarkable improvements on all

parameters. For the financial year ending September

30, 2008, the bank’s asset plus contingents jumped to

N2.384 trillion, up from N1.18 trillion for the period

ending June 2007, representing an increase of 87 per

cent. Within the same period, profit before tax rose to

N48.939 billion up by 90.60 per cent from N25.676

billion while profit after tax also rose to N46.524 billion

up by 147.74 per cent from N18.779 billion.

The management’s commitment to excellent banking

practice has been richly rewarded in the form of

numerous awards. In October 2008, Zenith Bank was

named ‘Best Global Bank in Africa” by the African

Banker Magazine. The award came on the heels of

another one, “Best Bank in Nigeria” for 2008 by

Euromoney. The bank had earlier in the year won two

major awards, ‘Bank of the Year’ and ‘Corporate Citizen

of the Year’ at the 2008 ThisDay Award for Excellence.

This is in addition to the ‘CEO of the Year,’ award won

by the Managing Director for his sterling achievement

in banking. The bank also won two awards, Best Bank in

ICT and Best Bank in Export Finance, at the Vanguard

Bankers’ Award held in April 2008.

CORPORATE PERFORMANCE

ACCOLADES

CORPORATE PROFILE

The bank maintains sound corporate governance culture in line with global best practices. The bank's customer-specific approach to customer service consistently reinforces its value creation processes towards assisting customers in their goals.


In November 2007, the bank was named the ‘African

Bank of the Year,’ by the Africa Investor magazine. The

same year, Zenith Bank emerged the ‘Quoted Company

of the Year’ at the annual President’s Merit Awards

organized by the Nigerian Stock Exchange (NSE). In

January 2007, Zenith was adjudged the most customer-

focused bank in Nigeria from a survey conducted by

foremost consulting firm, KPMG. The bank was

adjudged the most ‘Corporate Socially Responsible

Company’ in Nigeria by ThisDay newspaper early in

2007 and later in the year as the ‘Most Corporate

Socially Responsible Bank in Africa’ by the African

Banker magazine.

The bank efficiently deploys a wide area network

facility, which is seamlessly integrated through an

associate company – Cyberspace Network, that

operates a 3.5GHZ Fixed Wireless Access licence

providing a communication backbone for the Bank and

ICT BACKING

its subsidiaries. This enables the bank provide efficient

financial services including but not limited to:! Corporate and Commercial Banking Services! E-business Solutions including local and international

card business,! Treasury and Cash Management Services! Foreign Exchange and Trade Finance Services! Funds/Assets Management! Private Banking, Investment Banking ! Financial Advisory Services.

The bank also offers a wide range of specialised

financial services through its subsidiaries, which

include:! Zenith Capital Limited – provides a full range of

investment banking services; including corporate

finance & advisory, capital markets, asset

management, sales & trading, and principal

investment.

! Zenith Securities Limited - a securities trading and

asset management company

! Zenith Registrars Limited - share registration services

! Zenith General Insurance Company Limited - our

insurance and risk underwriting company

! Zenith Pensions Custodian Limited - a pensions

custodian management company.

! Zenith Life Assurance Company – underwriting of

group life, individual life and annuities

! Zenith Trust Company Limited – a trusteeship

services company

! Zenith Medicare Limited – a health insurance

company

! Zenith Bank (Ghana) Limited – a banking subsidiary

! Zenith Bank (UK) Limited – a banking subsidiary

! Zenith Bank (Sierra Leone) Limited – a banking

subsidiary

! Zenith Bank Representative Office (Johannesburg,

South Africa) – a banking subsidiary

SUBSIDIARIES

CORPORATE PROFILE

In November 2007, the bank

was named the 'African Bank

of the Year,' by the Africa

Investor magazine. The same

year, Zenith Bank emerged

the 'Quoted Company of the

Year' at the annual

President's Merit Awards

organized by the Nigerian

Stock Exchange (NSE).

CORPORATE STRATEGY

Over the years, Zenith Bank clearly set out to differentiate itself in the banking industry through its service quality,

drive for a unique customer experience and the caliber of its client base. Today, it is easily associated with the

following attributes in the Nigerian banking industry:

! Innovation

! Best risk assets portfolio

! Consistent superior financial performance

! High quality personnel

! Leadership in the use of Information and Communication Technology (ICT)

! Consistent in raising the bar of competition, and

! Formidable marketing team

The overall vision of the bank is to make the Zenith brand a reputable international financial services network

recognized for innovation, superior customer service and performance while creating premium value for all

stakeholders.

The key strategies that will enable us deliver our vision are:

To deliver superior and tailor-made service experience to all our customers at all times.

Develop deeper and broader relationship with all clients and strive to understand their individual and industry

peculiarities with a view to developing specific solutions for each segment of our customer base.

Significantly expand our operations by adding various distribution channels and entering into new markets.

Maintain our position as a leading service provider in Nigeria while expanding our operations internationally in

West Africa and the financial capitals of the world.

Strive to be a leading service provider in Nigeria by continuing to build on long-standing relationships, capabilities

and the strength of our brand and reputation.

Expand our business through the establishment of key subsidiaries for the provision of non-bank financial services

to accentuate the service offerings and experience of our customers.

Continually enhance our processes and systems platforms to deliver new capabilities and improve operational

efficiencies and achieve economies of scale.

KEY STRATEGIES


NOTICE IS HEREBY GIVEN that the Eighteenth Annual General Meeting of Zenith Bank Plc will hold at the Shehu Musa thYar’ Adua Centre, 1, Memorial Drive (opposite Sheraton Hotels & Towers) Abuja at 9.00 a.m. on the 4 day of

December, 2008 to transact the following business:-

1. To receive and adopt the Audited Accounts for the fifteen months ended 30th September, 2008, the Reports

of the Directors, Auditors and Audit Committee thereon.

2. To declare a dividend.

3. To re-elect retiring Directors.

4. To authorize the Directors to fix the remuneration of the Auditors.

5. To elect members of the Audit Committee.

To consider and if thought fit, to pass the following as ordinary resolution:

6. To approve the remuneration of the Directors for the year ending September 30, 2009.

To consider and if thought fit, pass the following resolution which will be proposed as:

ORDINARY RESOLUTIONth7. “That effective 2008 the Financial year end of the bank be and is hereby changed from 30 June to 30th

September”

thDated this 28 day of October, 2008.

A member of the company entitled to attend and vote at the general meeting is entitled to appoint a proxy in his

stead, All instruments of proxy should be completed, stamped and deposited at the business office of the

Company’s Registrars, Zenith Registrars Limited, 89A, Ajose Adeogun Street, Victoria Island, Lagos State not later

than 48 hours before the time of holding the meeting. A proxy need not be a member of the company.

ORDINARY BUSINESS

SPECIAL BUSINESS

PROXY:

NOTICE OF ANNUAL GENERAL MEETING


1212 group annual report & accounts, 2008group annual report & accounts, 20081212 group annual report & accounts, 2008group annual report & accounts, 2008

NOTES:

1. Dividend

If the proposed dividend of N1.70k for every share of 50k is approved at the Annual General Meeting, direct

payment (via e-dividend) to the respective bank accounts of shareholders shall be effected on the 5th of

December, 2008 while dividend warrants for shareholders who have not completed the e-dividend Mandate thForm shall be posted on the 8 of December 2008. In line with the foregoing, shareholders are encouraged to

complete the attached Mandate Form for the payment of e-dividend and send same to the Registrars as soon

as they receive this Notice.

2. Closure of Register of MembersthThe Register of Members and Transfer Books of the Company will be closed from 24 November, 2008 to

th28 November, 2008 (both dates inclusive), to enable the Registrar prepare for the payment of dividend.

3. Audit Committee

In accordance with Section 359(5) of the Companies and Allied Matters Act, 1990, any shareholder may

nominate another shareholder for appointment to the Audit Committee. Such nomination should be in

writing and should reach the Company Secretary at least 21 days before the Annual General Meeting.

By Order of the Board

MICHAEL OSILAMA OTU, ESQ.

Company Secretary

Plot 87, Ajose Adeogun Street

Victoria Island, Lagos

NOTICE OF ANNUAL GENERAL MEETING


Zenith Bank, from inception, places a high premium on the pivotal role of exceptional service delivery in its drive to consistently exceed customer expectations. Thus, the bank has not only put in place, appropriate strategy to meet and surpass customer expectations, but also ensures that such a strategy is being constantly honed and in tune with the changing taste and sophistication of the customer. The underlying philosophy is for the bank to remain at all times, a customer-focused or customer-centric organization, with a clear understanding of its market and environment.

This vision had at various times in the life of the bank, led to assigning critical and pervasive roles to Total Quality Management (TQM), Customer Service Ambassadors, Operation Service Excellence Teams, among others. Thus, at all times, all structures and processes are fashioned to drive consistent improvement in the quality of service delivery. Any lapse at any stage of the service delivery chain is viewed seriously as 'service obstruction', and attracts appropriate sanction.

Zenith Bank, as a child of the 'Information Age', laid the foundation of its structures and processes on cutting-edge Information and Communications Technology (ICT) infrastructure. This ensures that every operation/transaction is carried out via a medium that makes for speed, utmost flexibility, accuracy and convenience for the customer. Thus, in Zenith Bank, all activities are anchored on the E-platform, ensuring service delivery through the electronic media to all customers irrespective of place, time and distance. This has aided the achievement and sustenance of deeper and broader relationship with all clients, the peculiarities of their individual or industry needs not-withstanding.

Today, Zenith Bank has taken customer satisfaction to a height where encomiums, accolades and laurels come in droves as testimony to exceptional quality of the bank's services. Thus, a recent industry-wide survey conducted by KPMG Professional Services on customer service quality among Nigeria banks, showed Zenith Bank as the “Most Customer-focused Bank” in the country. This goes to affirm a tradition of superior service quality that has become a heritage of Zenith Bank.

As a pathfinder in ICT-enabled banking in Nigeria, Zenith Bank has leveraged its in-depth understanding of the local business environment and global financial markets to develop unique e-solutions to meet specific customer needs. The unique deployment of ICT to customer service delivery has made the Zenith franchise synonymous with e-banking. The bank's e-products range covers virtually all services and fall into three broad categories:

� Payment / Collection Solutions;� Card Solutions, and� Reporting Tools.

Some of these products are explained below:

Electronic Point of Sale is an alternative electronic funds collection channel for customers/merchants who currently collect cash for goods and services.

Sal-Pay Solutions for our corporate customers who do not require multiple levels of authorizers to effect their employee salary payments.

Zenith Swiftpay is a payment solution on which the key distributor schemes are anchored. The product is targeted at manufacturers and their key distributors.

Zenith Automated School Solutions is an electronic solution through which students' administration and registration procedures are captured seamlessly and efficiently. The product is deployed in partnership with our technical partners, Socketworks Limited.

Payment/Collection Solutions

EXCELLING THROUGH EXCELLENTSERVICE DELIVERY


Zenith ATM is an electronic payment platform for basic banking transactions.

Zenith Flowline Application is an automated cheque writing solution that eliminates physical cheque writing thus enhancing corporate payment system.

Zenith Automated Direct Payment System (ADPS) is an electronic payment solution for corporate customers that eliminate manual writing of many cheques and the associated delays.

Corporate i Bank is a product for corporate customers to handle all classes of payments including salary, multiple utilities payments and payments to third parties generally.

Zenith Mobile Commerce: with the use of the mobile phone, customers can perform various financial transactions on-line such as:

– Airtime purchase– Banking– Bill Payment– GSM Postpaid– Pay DSTV etc.

This service is made available to customers currently on the e-Tranzact platform.

Etranzact Card is an online card for use not only on Point of Sale (POS) and internet but also mobile phones.

MasterCard/VISA credit cards offer Zenith account holders an approved line of credit with up a period of up to 45 days interest free. Cards are available in Classic, Gold and Platinum and the bank proudly introduced a first in the country, the VISA dual currency cards (NAIRA + DOLLAR CARD).

MCU Debit Cards is our internationally branded MasterCard debit card tied directly to a cardholder's domiciliary account which is debited immediately at the point of payment.

Charge Card, another member of the Zenith MasterCard family created for non-Zenith account holders and having the same benefits of a credit card except that it requires collateral.

Websurfer Card is a MasterCard brand exclusively for internet payments. It is a prepaid reloadable card for use only on the internet, providing extra security for Zenith card holders.

Personalized VISA Prepaid Card is an international prepaid card on which the name of the cardholder is embossed. It is accessible on ATMs, POS, web as well as mail and telephone orders.

BUXZ Instant Issuance VISA Prepaid Card is a globally accepted generic card ideal for making e-payments which can be obtained instantly at any branch. The card is accepted globally where ever the Visa acceptance sign is displayed.

EazyCard is an online debit card tied to a customer's account with the bank. The card can be used on Point Of Sales (POS) and ATMs connected to the Interswitch network.

Card Solutions

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07/06


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VpayCard is a local VISA debit card with the same characteristics and features as our EazyCard.

EasyPay/Easy Trade is a special merchant service for customers (merchants) who want to collect electronic funds for their goods and services via the web.

NIS InterSwitch/Etranzact Cards are exclusive for Nigerian Immigration Service web payments. Cards are obtainable at any Zenith Bank branch.

20/20 Cards are reloadable Naira prepaid cards on which a N20 fee is charged for every load as well as a N20 ATM fee whenever the card is used on Zenith ATMs.

Payroll Cards are ideal for corporate salary solutions. These serve as a means of paying employees as opposed to the cheque payment system.

Zenith Notification Suite is a wide range of electronic notification solutions which include the following:(i) Notification of withdrawals and deposit transactions.(ii) Notification of deposits only(iii) Other transaction notifications:-

� Shipping Documents� BC Notification Bills for Collection� LC Notification Letter of Credit� Form M Notification (Approval & Scanning Stage)� RAR Notification (Risk Assessment Report)� Monthly statements notifications

The notifications are delivered via e-mail or mobile SMS technologies.

Zenith Internet Banking affords customers a wide range of transaction activities which include the following:Check account balances & access transaction history.

� Cheque book & Draft request� View & download account statements.� Cheque Confirmation� View real time transactions activity especially for corporate customers� Bulk Payment (One to Many)� Download monthly statements� Self to Self transactions� Inter (You to anybody in Zenith); Intra (You to You)� Bill Payment� View Master Card transactions

Zenith Telelink and Mobile banking products anchor our range of mobile banking transactions and enquiries using both land and mobile phones.

Reporting Tools



CHIEF EXECUTIVE’S REVIEW

Jim OviaGroup Managing Director / Chief Executive

eing one of the six largest banks in

Africa with Shareholders Funds of

N346 billion (US$3 billion), Zenith BBank remains the largest bank in

Nigeria with Total Assets base of N2.5 trillion

(US$21 billion) as at September

30, 2008. It is also Nigeria's

most profitable financial

institution with Profit After

Tax of N51.9 billion (US$444

million).

Our superior performance

was achieved as a result of

the efforts of our highly

motivated and committed

w o r k f o r c e w h o a r e

consistently focused on

offering quality service that

surpass customers' expectations. Most of the

senior management team have worked and

blended together for over a dozen years.

When you make a cash withdrawal or deposit

funds in any of your Zenith Bank accounts

Technology:

irrespective of which city your account is

domiciled, your mobile phone beeps a few

minutes later alerting you via SMS of such

transaction. This innovation which was first

deployed in Nigeria by Zenith Bank a few years

ago, would soon become

obsolete. The team of

Zenith IT are inspired

to deploy a superior

technology in 2009 to

serve the customers

better.

A t Zen i t h Bank ,

consistent investment

and deployment in

i n f o r m a t i o n

t e c h n o l o g y i s a

deliberate strategic

imperative. This gives the bank a superior

competitive advantage.

We are confident about the future as we expect

stable economic environment.

Future Outlook:

Our superior performance

was achieved as a result of the

efforts of our highly motivated

and committed workforce

who are consistently focused

on offering quality service

that surpass customers'

expectations.


steemed shareholders, invited guests,

distinguished ladies and gentlemen, I am thvery pleased to welcome you all to the 18

Annual General Meeting (AGM) of our Egreat institution and to present to you the Annual

Report and Financial Statements for the financial

year ended September 30, 2008. This tells you

right away that our financial year was adjusted to

cover a period of fifteen months; three months

more than the twelve months period we have

been running. This measure is part of a strategic

move to adapt to the dictates of our operating

environment and be better positioned in the

market place. Henceforth, therefore, our financial

year will return to twelve calendar months,

running from October to September, as against

the July to June that we have been operating in the

past.

Before I present to you details of the fifteen

month financial scorecards, I deem it pertinent to

do a quick review of the socio-economic

environment within which our bank operated

during the period. Without doubt, the financial

results that I am about to present to you were

achieved in an environment that was impinged

upon by a number of socio-economic factors;

some wholesome, others challenging. But I can

assure you that as always, our dynamic bank has

posted sterling performances.

It is therefore with a high sense of pride and

satisfaction that I proceed to review the economic

environment in which the bank operated, and

also highlight the operating results for the fifteen

months ended September 30, 2008.

Sustenance of macro-economic stability that has

been the core objective of economic policies in

the past few years remained so during the fifteen

months period under review. This translated to

fiscal and monetary polices of government

focusing on ensuring that the rate of inflation

remained low and at single digit while the

exchange rate remains stable and the interest

THE ECONOMY

CHAIRMAN’S STATEMENT

Macaulay PeppleChairman


rates low and declining. However, mixed results

were achieved in these regards. While the

exchange rate improved markedly, the inflation

targets were not attained. Thus, the average

exchange rate of the Naira against the US dollar

which stood at N127.00 to US$1 at end-June

2007, appreciated to N116.00 to US$1 as at end-

December 2007, but came to N117.65 to US$1 at

end-September 2008. On the other hand,

inflation rate (year-on-year) which was at 6.40 per

cent at end-June 2007, rose slightly to 6.60 per

cent at end-December 2007; it jumped to 12.0

per cent in June 2008, and

climbed further to 13.0

p e r c e n t a t e n d -

September 2008. This

inflation rates trend was

attributable to increased

capital injections by the

v a r i o u s t i e r s o f

government, increases in

the prices of some staple

food items and building

materials, diesel and gas,

among others.

The economy as measured

by Gross Domestic Product (GDP) recorded a

steady growth during the period under review.

Thus, according to the Central Bank of Nigeria

(CBN) figures, the GDP measured in 1990 basic

prices, grew by 6.22 per cent in 2007, and stood

at an estimated 6.45 per cent at end-September

2008. This growth trend was due to a number of

factors, including favourable revenue inflow

arising in part from high crude oil prices in the

international market. Other contributory factors

include stability in the prices and supply of

petroleum products, improved foreign direct and

portfolio investment inflow, stable foreign

exchange market, among others. From a level of

US$64 per barrel in June 2007, the average crude

price stood at US$100 per barrel at end-

December 2007; rose further to US$135 per

barrel by June 2008, but dropped to US$97 per

barrel at end-September 2008. These prices were

as against US$40 per barrel and US$59 per barrel

that were the benchmarks for 2007 and 2008

budgets respectively. This oil price trend

translated into handsome foreign exchange

earnings and sustained improvement in foreign

exchange reserves as well as a boost to the

‘excess crude account’. Thus, the external

reserves which stood at US$52 billion in

December 2007 rose to US$59.20 billion in June

2008, closing the fifteen months period under

review at US$63 billion.

Nigeria, also during the

period under review,

r e c e i v e d i m p r o v e d

sovereign and currency

ratings by Fitch Ratings

and Standard and Poor’s (S

& P). Thus, while Fitch

awarded Nigeria BB- (same

as in the past two years), it

upg raded he r l o ca l

currency rating from BB- to

BB, not ing that the

“economy is stable and

government’s f iscal management also

improving”. S & P also awarded BB- to Nigeria,

explaining that this was on account of greater

fiscal flexibility “due to a much reduced debt

burden and high oil prices”.

In the banking sector, the Central Bank of Nigeria

applied a number of regulatory initiatives to

sustain the gains of consolidation and soundness

of the macro-economy. In influencing interest

rates, money supply and inflation, the apex bank

severally adjusted the Monetary Policy Rate (MPR)

and other variables during the period under

review. It raised the MPR from 8.0 per cent in June

2007 to 9.50 by end-December 2007; and further

to 10.50 per cent in June 2008, but dropped it to

9.75 per cent by end-September 2008. It similarly

Given our antecedents of excellent results delivery, I can assure you that more than ever before, we will continue to render to you unparalleled premium service. In pursuit of this, we have further upgraded and refitted our ICT infrastructure to deliver our bouquet of service offerings in a manner that beats customer expectations.


altered the cash reserve ratio (CRR) and the

liquidity ratio, among others—”to lubricate the

system”. These measures generally moderated

interest rates movement during the period under

review. Average prime lending rate which stood at

17.63 per cent in June 2007, inched up to 17.70

per cent in September same year, but closed the

twelve months ending September 2008 at 17.49

per cent. Similarly, average interest rate on

savings account which was at 3.45 per cent in

June 2007 remained almost flat at 3.52 per cent

as at end-September 2008. All these reflected in

increased deposit money banks’ (DMB) lending,

both to the economy and particularly to the

private sector.

The apex bank during the fifteen months also

introduced or announced

some policies which it either

cancelled or postponed.

These include the Naira re-

denomination under which

“all Naira assets, prices and

contracts” would have been

re-denominated by dropping

two zeroes or two decimal

points to the left with effect

from August 2008. There

w a s a l s o a

proposal/cancellation of a

common accounting year-

end for the DMBs, owing to

“ o b s e r v e d d e s p e r a t e

behaviour of some banks in

deposit mobilization and hiking of interest rates

to levels that cannot be justified by the

fundamentals”. All this influenced the activities of

all economic agents including the banks during

the period under review.

In the capital market, there was a mix of the reign

of ‘the bear and the bull’—with the first nine

months of the period under review recording

heightened activity and the last six months

experiencing a lull. The net effect of this was a

downward trend in all indices of the market. The

Nigerian Stock Exchange (NSE) All-share Index

(ASI) which closed 2007 at 57,990.22 points, had

by September ending 2008 declined to 46,

216.13 points; while the Market Capitalization

that hit N10.12 Trillion at end-December 2007,

ended the same period at N9.84 Trillion. These

outcomes which reflected in the depreciation in

the value of the shares of quoted companies were

attributable to a number of factors, including the

global financial meltdown that erupted in most

advanced economies by September 2008. The

government and the regulatory agencies have put

a number of measures in place to arrest this

trend, and we are very optimistic about a

turnaround soon.

It is noteworthy that even

with the bearish trend in

the market, your bank,

Zenith Bank Plc, still

ranked among the top

performers in the market

by all indices. With a

market capitalization of

N613.70 billion as at end-

September 2008, Zenith

Bank was the quoted

company with the second

highest value in the entire

market. Its streak of

sterling performances,

more than in the previous years, earned it a number

of accolades, recognitions and prestigious awards,

locally and internationally in the fifteen months

under review. Some of these awards include: ‘Best

Bank in Nigeria 2008’ by The Euromoney Magazine;

‘Most Customer-Focused Bank 2008’ by KPMG; ‘Bank

of the Year 2008’ by ThisDay Newspaper; ‘Best

Global Bank in Africa 2008’ by African Banker

Awards, among so many others.


Let me also assure you that as a bank, we will continue to reinvent ourselves and our systems to effectively tackle the unfolding challenges and exploit emerging opportunities. With our spread into some key financial centres of the world, we are determined to remain a global player and to keep discharging the responsibilities arising therein. Obviously, we are not unmindful of the demands and obligations that go with this.



FINANCIAL RESULTS

DIVIDEND

It is gratifying to note that even in the face of the

heightening competition in the financial services

sector, your bank and its subsidiaries have

continued to surpass performance projections.

Thus, the financial results of the Group for the

fifteen months ended September 30, 2008, show

significant appreciation in all parameters. These

results are, once again, an eloquent testimony to

the continued sound financial health of the

Group. For the bank, profit before tax was

N48.94 billion, representing a 110 per cent

increase over last year’s figure of N23.29 billion.

Gross earnings increased by 113 per cent over

the figure of N89.19 billion for last year to hit

N190.08 billion during the period under review.

Total assets plus contingents similarly increased

by 102 per cent or N1.20 trillion to stand at N2.38

trillion during the period. Total deposits grew

104 per cent to N1.16 trillion; while

shareholders’ funds rose by 200 per cent to hit

N338.48 billion.

As a Group, the performance indices also recorded

significant improvements. Thus, the Group gross

earnings which stood at N94.88 billion at June 30,

2007 rose by 120 per cent to hit N208.29 billion at

September 30, 2008. Group profit before tax grew

by 119 per cent, from N25.67 billion to N56.12

billion during the period. Profit after tax for the

Group also rose substantially, by 177 per cent, from

N18.78 billion to N51.99 billion. Group total deposit

rose by 87 per cent, from N634.49 billion to N1.18

trillion; while the Shareholders’ fund grew by 198 per

cent, from N116.45 billion to N346.61 billion. Group

asset plus contingents which stood at N 1.27 trillion

in 2007, rose by 98 per cent, closing the financial

year ended September 30, 2008 at N2.51 trillion.

Our commitment to delivering superior returns to

shareholders remains unwavering; and this, we

once again demonstrate by ensuring that a

reasonable chunk of our profit is in the hands of

our valued investors. The Board is therefore

pleased to recommend a dividend of N28.446

billion; that is, 170 kobo per 50 kobo share. This is

a 207 per cent rise in total dividend and 70 per cent

growth in dividend per share over the 2007 levels.

We have no reason to relent in our expansion

drive; rather, we have continued with increased

zeal during the fifteen months under review,

leading to more subsidiaries and further

spreading of our branches and franchise across

the country and beyond. Our branch network now

goes beyond state capitals, the FCT Abuja and

major towns and cities in the country. We have

endeavoured to reach most of the local

government headquarters in the land. In fact, in

addition to the already existing Zenith Bank (UK)

Limited in London and Zenith Bank (Ghana)

Limited, we opened another wholly-owned

subsidiary in Freetown, Sierra Leone during the

period under review. Our representative office in

Johannesburg, South Africa is up and running. I

can assure you that this growth and expansion

effort will be sustained in the foreseeable future

in our determination to continue to play as a

reputable global financial institution.

May I, at this juncture, express our inestimable

gratitude and indebtedness to our teeming

valued customers for their continued patronage

and unwavering loyalty to the Zenith brand. In

point of fact, your invaluable contribution and

consistent support remains the key driver of the

sterling results that we turn in year-in year-out as

a bank. Given our antecedents of excellent results

delivery, I can assure you that more than ever

before, we will continue to render to you

unparalleled premium service. In pursuit of this,

we have further upgraded and refitted our ICT

infrastructure to deliver our bouquet of service

offerings in a manner that beats customer

expectations. We have also further streamlined

GROWTH AND EXPANSION

CUSTOMERS


FUTURE OUTLOOK

Dear shareholders, with every sense of pride and

satisfaction, I can say that Zenith Bank has

maintained its culture of excellent performance up

to and including the period under review. And every

indicator shows it is poised to do even better in the

future. As a bank, we are monitoring developments

both in the local and global economy, and have

proactively put in place mechanisms to ensure we

keep excelling. It is yet a fact that the fundamentals

of the Nigerian economy remain sound and portend

even better days ahead.

Let me also assure you that as a bank, we will

continue to reinvent ourselves and our systems

to effectively tackle the unfolding challenges and

exploit emerging opportunities. With our spread

into some key financial centres of the world, we

are determined to remain a global player and to

keep discharging the responsibilities arising

therein. Obviously, we are not unmindful of the

demands and obligations that go with this; which

is why we have entrenched global best practices

in every facet of our operations. We also ensure

that all these are driven by the tenets of good

corporate governance.

Ladies and Gentlemen, on behalf of the Board, I

would like to thank you very sincerely for your

unwavering support. The future is indeed very bright

for all of us. May God continue to bless us all.

Thank you.

Macaulay Pepple

Chairman


a r r angemen t s f o r more mean ing fu l

engagements with all our stakeholders,

especially our customers. Let me assure you that

as a responsive and customer-focused bank, we

will continue to evolve methods and strategies to

consistently deliver financial solutions that elicit

your enthusiasm and surpass your expectations.

At this meeting, the following directors will retire

by rotation in line with the bank’s Article of

Association and being eligible for re-election, they

have offered themselves for re-election. They are

Prof. L. F. O Obika, Alhaji Baba Tela, Mr. Andy Ojei

and Mr. Udom Emmanuel.

Esteemed shareholders, permit me to state that

our staff remain the most critical resource for our

successful operations as a bank. This is why we

have continued to place a very high premium on

staff quality and welfare. In this regard, we have

continued to attract and retain some of the

brightest professionals in the banking industry in

Nigeria and beyond. In tandem, we have also

created and sustained a highly motivating work

environment and reward system that has ensured

one of the lowest staff turnover rates in the

industry.

I can assure you that we will continue to sustain

this enabling environment that makes for the

development of management and staff talents

and skills; ensures self actualization and the

attainment of corporate objectives. On behalf of

the Board of Directors and Shareholders, I

express our gratitude to the management and

staff of the bank for their commitment and

sterling performances. Please, remain steadfast.

BOARD OF DIRECTORS

STAFF



ZENITH BANK…Focused partnership with the society

EDUCATION

From inception, Zenith Bank takes corporate social

responsibility (CSR) as a way of life; which informs not

only how we give back to society but also how we

partner with our various stakeholders. In fact, CSR is

our channel for appreciating the society for providing

the enabling environment in which we operate.

Therefore, we deliberately go beyond the bounds of

corporate citizenship to impact positively on the entire

society through robust CSR endeavours that improve

the lot of mankind.

But because we cannot be everything to everybody at

all times, our CSR strategy focuses on critical areas of

societal needs. Zenith Bank is therefore guided by its

firm belief in the instrumentality of education and

Information and Communication Technology (ICT) as

the most powerful tools for youth empowerment,

nation building and wealth creation. We also give

ample attention to issues of health, environmental

care, sports, infrastructure and security as well as

assistance to victims of natural and other mishaps. We

are also in strategic alliances with reputable Non-

Governmental Organizations (NGOs) in the execution

of CSR projects in some focus areas.

Our unparalleled contributions through CSR initiatives

have been widely acknowledged, commended and

applauded by various stakeholders. In fact, these

efforts have attracted awards from far and near. The

ThisDay Award for Excellence was won by Zenith as the

“Most Socially Responsible Corporate Organization” in

Nigeria, while The African Banker magazine also

awarded the Bank the “Most Corporate Socially

Responsible Bank in Africa”.

Zenith Bank's high premium on education remains

unwavering and this is borne out by the variety and

volume of its financial commitment to the sector

during the period under review. A number of

universities, polytechnics, colleges of education,

secondary and primary schools were beneficiaries

during the year. On the whole, more than 20

educational institutions received donations/

assistance (in cash and kind) from the bank during the

period. Some of them include the University College

Hospital (UCH) Ibadan (computer units), Federal

College of Education Gusau, International School

University of Lagos, University of Uyo, Bells University,

St. Augustine College of Education, University of Benin,

Lagos State University (fully equipped ultra modern ICT

centre).

In the secondary schools category, the following were

beneficiaries: Ojota Senior Secondary School; Vivian

Fowler Memorial College for Girls, Lagos; Children

International School Lekki; Victoria Island Senior

Secondary School; Lekki British International High

School; Western College Yaba; Greenwood House

School; Topgrade Secondary School; Ultra Modern

Central School, Amawbia, Anambra, Greenspring

Secondary school.

Other schools that benefited from Zenith philanthropy

during the year under review were: Lagos Preparatory

School, Ikoyi; Nigerian Defence Academy; Nigerian

Navy School Ojo; Buba Yero Primary School; College of

Education Agbor, Armed Forces Command and Staff

College, Jaji.

Zenith Bank as a child of the 'information Age', places a

lot of premium on the use of ICT to transform the life of

the people-especially the youth, who are victims of the

'Digital Divide'. The Bank therefore remains committed

to helping the youths bridge the digital divide and

empower them to take advantage of the limitless

opportunities open to them in the information super

highway. In this regard, the bank held the 5h edition of

ICT/YOUTH EMPOWERMENT

Our CSR strategy does not, however, allow us to be everything to everybody, but to focus on critical areas of societal needs. Thus, Zenith Bank is guided by its firm belief in the capacity of education as well as Information and Communications Technology (ICT) as the most potent tools for youth empowerment, nation building and wealth creation.

CORPORATE SOCIAL RESPONSIBILITY


its 'Youth Empowerment Forum for Digital Revolution'

in Lagos, at which over 4000 youth from select tertiary

and secondary schools were in attendance.

On the occasion, Zenith Bank's Managing

Director/Chief Executive, Mr. Jim Ovia, made a

powerful presentation titled, “Youths and ICT in a

Borderless World: Opportunities and Challenges” There

was also a raffle draw from which several lucky

youths/winners emerged; 50 of them won a laptop

each while over 1000 of the them went home with

Visafone Handsets.

Zenith Bank continues to contribute substantially to

health causes in demonstration of its support for the

pursuit of the Millennium Development Goals (MDGs).

Its key areas of interest include reducing child

mortality, improving maternal health and combating

HIV/AIDS, among others. In this regard, during the

period under review, the bank rendered financial

assistance to health institutions and agencies

including: The Nigerian Red Cross Society, Paediatric

Association of Nigeria; Kanu Heart Foundation; Sickle

Cell Club Unilag; World Confederation of Physical

Therapy. The bank also made substantial contributions

towards over a dozen local and/or overseas treatments

of critical health cases, including heart surgeries,

cancer treatment, kidney transplant, and limb

replacements, among others.

Zenith Bank's interest in the wellbeing for the youth is

also demonstrated through sponsorships and

involvements in sports and other vocational activities.

Thus, during the year under review, the bank part-

sponsored the 2008 NUGA games, 'Zenith Bank

Premier Female Basketball League' under the auspices

of the Nigeria Basketball Federation. The bank also

sponsored the Armed Forces annual sports week,

Nigerian Petroleum Development Company Golf

tournament, Ladies Golf Association of Nigeria

tournament, and also sponsored inter-house sports

events for various schools, among others.

HEALTH AND WELFARE

SPORTS

RELIGIOUS ORGANIZATIONS

OTHERS

Zenith Bank remains committed to the spiritual

wellbeing of Nigerians, as exemplified in its donations

and contributions to religious causes during the year

under review. The beneficiary organizations include:

Church of Assumption Falomo, The Redeem Christian

Church of God, St. Joseph's Chosen Church of God

International, Mountain of Fire and Miracle Ministries,

Cathedral Church of St. Peter, Catholic Archdiocese of

Lagos, Seminary of SS. Peter & Paul Ibadan, St. Paul

Catholic Church Ujemen, Saint Patrick's Catholic

Church, Owode-Ibeshe, King of Glory Concern Chapel

International, The Redeem Christian Church of God

Praise Tabernacle, among several others.

In several other ways, the bank continues to render

assistance to the community and the society at large.

During the review period, the bank, played a major

role in assisting the victims of the flood disasters in

Plateau and Adamawa states, it donated 10 Hilux

Toyota cars to the Lagos State government. It also

donated towards the renovation of the Cyprian

Ekewensi Centre for Arts & Culture, renovation and

beautification of the car park at the MUSON centre,

Lagos. The bank also supported the activities of several

other institutions like The Nigerian Stock Exchange,

Ministry of Commerce and Industry, to list a few.

Zenith Bank also continues in its collaboration with

diverse Non-governmental Organizations (NGOs); and

assisted a number of them during the review period.

They include Widowhood Helpline; FATE Foundation;

ICARE; Nigeria Leadership Initiative; Growing

Businesses Foundation; the Nigerian Economic Summit

Group; NEPAD Business Group-Nigeria; among others.

The bank also continued with its Academic Excellence

Awards, from which many outstanding graduating

students of number of universities benefited; it also

rendered sundry other assistance to several tertiary

institutions.

CORPORATE SOCIAL RESPONSIBILITY


Macaulay PeppleChairman Group Managing Director/CEO

Jim Ovia

DirectorProf. L.F.O. Obika

Godwin EmefieleDeputy Managing Director

Sir S.P.O. Fortune EbieDirector Director

Chief E. M. Egwuenu

Director

Sir Steven OmojaforDirector

Alhaji Baba Tela

BOARD OF DIRECTORS


BOARD OF DIRECTORS

Director

Babatunde Adejuwon Peter AmangboExecutive Director

Executive DirectorUdom Emmanuel

Executive Director

Apollos IkpobeExecutive Director

Elias Igbinakenzua

Executive DirectorAndy Ojei


EXECUTIVE MANAGEMENT

Adaora Remy Umeoji Andy OjeiUdom Emmanuel

Jim Ovia Godwin Emefiele

Elias Igbinakenzua Apollos IkpobePeter Amangbo


CORPORATE GOVERNANCE

enith Bank, conscious of the twin concepts of

trust and confidence as an essential aspect of

our business is committed to good corporate Zgovernance in the conduct of our business

and in our relationship with all our stakeholders – the

regulators, the depositors as well as shareholders.

The Bank continuously reappraises its processes to

ensure that its business is conducted in line with good

corporate governance and global best practices.

The business of the Bank is driven primarily by the

Board of Directors, which exercises its oversight over

the bank’s operations. Board members are conversant

with the business of the bank.

The Board exercises its oversight using various key

committees.

The Board of Directors is made up of a non-

Executive Chairman, six (6) non-Executive

Directors and seven (7) Executive Directors.

The Board comprises persons of mixed skills and

experience in different fields of human

endeavour. Directors are conscious of their

statutory responsibilities and are well informed

of their obligations to shareholders. Adequate

training programmes have been put in place to

ensure that directors are constantly retrained to

keep them abreast of developments in the

industry and the economy.

During the financial year, Messrs. KPMG

professional services was engaged to carry out

an evaluation of Board members to determine

their level of effectiveness and to recommend

areas of possible improvement and changes.

The Board is responsible for:

� Reviewing and providing guidance for the Bank’s

corporate strategy, major plans of action and risk

policy.

� Review and approval of annual budgets and

business plans; setting performance objectives,

monitoring implementation and corporate

performance.

1. BOARD OF DIRECTORS

� Overseeing major capital expenditures,

acquisition and divestitures.

� Monitoring the effectiveness of the governance

practices which the Bank operates and making

appropriate changes as necessary.

� Ensuring the integrity of the Bank’s accounting

and financial reporting systems, including the

independent audit and that appropriate systems

of control and risk monitoring are in place.

� Ensure the adequacy of internal and external

controls.

� Establishment of the various Committees of the

Bank including the Terms of Reference, review of

reports of such Committees to address key areas

of the bank’s business.

The Board meets at least every quarter but may hold

extra-ordinary meetings to address urgent issues that

may arise.

The Board met nine (9) times during the out-gone

financial year.

The Board discharges its oversight functions

through various Committees put in place. The

Committees are set up in line with statutory and

regulatory requirements and consistent with

global best practices.

Membership of the Committees of the Board is

intended to make the best use of the skills and

experience of non-Executive Directors in

particular.

The Committees have well defined terms of

reference and consider matters that fall within

their purview to ensure that decisions reached

are as objective as possible.

The Committees of the Board meet quarterly but

may hold extra-ordinary sessions as the business

of the bank demands.

2. COMMITTEES

The following are the current standing Committees of

the Board:

The Committee is made up of seven (7) members

comprising four (4) non-Executive Directors and three

(3) Executive Directors of the Bank. The Board Credit

Committee is chaired by a non-Executive Director who

is well versed in credit matters, having retired as

Managing Director/Chief Executive of a commercial

bank. The Committee considers loan applications

above the level of Management Credit Committee. It

also determines the credit policy of the bank or

changes therein. The Committee meets quarterly but

may meet at such other times as business exigency

demands.

The Committee met five (5) times during the financial

year.

Members of the Board Credit Committee are as follows:

1. Chief Eddy Egwuenu

Chairman

2. Sir. S.P.O. Fortune Ebie

Member

3. Sir. Steve Omojafor

Member

4. Alhaji Baba Tela

Member

5. Mr. Jim Ovia

Member

6. Mr. Godwin I. Emefiele

Member

7. Mr. Elias Igbinakenzua

Member

This Committee is made up of seven (7) members: four

(4) non-Executive Directors and three (3) Executive

Directors. It is chaired by a non-executive Director.

The Committee looks into large scale procurement by

the Bank, and matters bordering on staff welfare,

discipline, staff remuneration and promotion. The

Committee meets every quarter but may also meet at

such other times as business exigency demand.

Board Credit Committee

Staff Matters, Finance and General Purpose Committee:


year.

The members are:

1. Prof (Prince) L.F.O. Obika

Chairman

2. Mr. Babatunde Adejuwon

Member

3. Sir. S.P.O. Fortune-Ebie

Member


Member

5. Mr. Jim Ovia

Member

6. Mr. Godwin I. Emefiele

Member

7. Mr. Apollos Ikpobe

Member

The Board Risk Management Committee has oversight

responsibility for the overall risk assessment of various

areas of the Bank’s operations and compliance.

Chaired by Chief Eddy Egwuenu (a non-Executive

Director), the Committee’s membership comprises the

following members:


Member


Member

3. Prof. (Prince) L.F.O. Obika

Member

4. Mr. Babatunde Adejuwon

Member

5. Mr. Jim Ovia

Member

6. Mr. Godwin Emefiele

Member

7. Mr. Peter Amangbo

Member

8. Mr. Udom Emmanuel

Member

Risk Management Committee:





The Committee met three (3) times during the financial

year.

The Chief Risk Officer has access to this Committee

and makes quarterly presentations for the

consideration of the Committee.

The EXCO comprises the Managing Director, who

chairs it and all Executive Directors. The Committee

meets twice weekly (or such other times as business

exigency may require) to deliberate and take policy

decisions on the effective and efficient management of

the Bank. It also serves as a processing unit for issues

to be discussed at the Board. EXCO’s primary

responsibility is to ensure the implementation of

strategies approved by the Board, provide leadership

to the Management team and ensure efficient

deployment and management of the Bank’s resources.

Its Chairman is responsible for the day-to-day running

and performance of the Bank.

There is also the Audit Committee of the Bank. The

Committee is established in line with Section 359(6) of

the Companies and Allied Matters Act, 1990. We

recognize the Committee as the “guardian of public

interest”, and reflect this both in the composition and

caliber of its membership. The Committee’s

membership consists of three (3) representatives of

the shareholders elected at the last Annual General

Meeting (AGM) and three (3) non-executive Directors.

Alhaji Hamis B. Musa, a shareholder representative

chaired the Committee during the year. Other

members of the Committee include Mr. Alade

Akesode, Sir. S.P.O. Fortune Ebie, Chief Eddy Egwuenu,

Professor(Prince)L.F.O Obika and Ms. Angela Agidi.

The Committee meets every quarter, but could also

meet at any other time, should the need arise.

Executive Committee (EXCO):

Audit Committee:


year.

In addition to the afore-mentioned Committees, the

Bank has in place, other Standing Committees. They

include:

(a) Assets and Liabilities Committee (ALCO)

(b) Management Committee (MANCO)

(c) Management Credit Committee (MCC)

(d) Risk Management Committee (RMC)

(e) Information Technology (IT) Steering Committee

Other Committees

isk Management is critical to our ability to

continually create shareholder value. The

nature and complexity of risks in our business Rrequires that we have a strong and robust risk

management structure to provide adequate oversight

at all levels of the organization.

The main thrust of Zenith Bank’s risk management

process is to enhance its capacity to create value by

providing a means of effectively dealing with

uncertainty and associated risks and opportunities.

The Board of Directors assumes the overall

responsibility for the system of risk management and

control in the Zenith Bank Group. The underlying role

of the Board is the attainment of the corporate

objective in order to create shareholder value. This

objective can only be attained by a robust risk

management and control practice. They therefore set

out the guidelines for risk management by setting

policies and direction for risk management practice in

the Zenith Bank Group.

The bank’s risk management policy is designed to

identify and analyze these risks, to set appropriate risk

Risk Policies

limits, and to monitor the risks and limits continually

by means of reliable and up-to-date administrative and

information systems.

Zenith Bank continually modifies and enhances its risk

management policies and systems to reflect changes in

markets and products and in best practice risk

management processes. Training, individual

responsibility and accountability together with a

disciplined and cautious culture of control lie at the

heart of the bank’s management of risk.

Various committees, comprising Executive Directors

and Senior Management Staff, formulate risk

management policies, monitor risk and regularly

review the effectiveness of those policies.

Risk Management Structure and Responsibilities

The risk management structure of the bank has been

established based on the business strategies and risks

inherent in the pursuit of those strategies. This

structure provides the framework for effectively

managing the bank’s risks on a daily basis. A summary

of key responsibilities is set out below:

The Board of Directors drives the entire governance

BOARD RISK MANAGEMENT

COMMITTEE

BOARD OF DIRECTORS

MANAGEMENT RISK

COMMITTEE

MARKET/ OPERATIONAL RISK

MANAGEMENT

EXECUTIVE COMMITTEE

CHIEF COMPLIANCE

OFFICER

AUDIT COMMITTEE

INTERNAL CONTROL &

AUDIT

BOARD CREDIT COMMITTEE

GLOBAL CREDIT COMMITTEE

CHIEF RISK OFFICER

CREDIT RISK MANAGEMENT

ASSETS / LIABILITIES COMMITTEE

TREASURY

ENTERPRISE RISK MANAGEMENT STRUCTURE

RISK MANAGEMENT AND CONTROL



and risk management process by setting the tone at

the top of the organization and the basis for how risks

should be viewed by management and staff. Through

its various committees, the Board monitors the

adequacy of internal control systems established by

Executive Management to manage risks.

The Audit Committee provides oversight on the

systems of internal control, financial reporting and

compliance. The Board Credit Committee determines

the credit policies and considers all loans above

defined levels. The Board Risk Management Committee

sets the risk philosophy, policies, and strategies as well

as provide guidance on the various risk elements

described below.

The Board risk control function is supported by various

management committees. These are Management Risk

Committee, Global Credit committee and the Assets

and Liabilities Committee.

The core Risk Management Department reporting to

the Chief Risk Officer is split into two (2) main groups

of Credit Risk Management and Market/Operational

Risk Management. These groups drive the key

elements of credit, market/liquidity and operational

risk area. All other risk elements are managed at the

ERM services anchored in the Market/Operational Risk

Management Group.

The Chief Compliance Officer is an independent

oversight function on the bank’s compliance with

relevant laws and regulations

Head, Internal Control and Audit, reviews the internal

control systems and processes and provides an

independent assurance on the entire system. The Head

of Internal Control and Audit reports to the Audit

Committee which comprises Non-Executive Directors

and representatives of shareholders and also has

unfettered access to the Managing Director/Chief

executive Officer

Head, Credit Risk Management, manages the bank’s

credit approval, disbursement and administration

process. This includes ensuring that credit policies and

procedures align with business objectives and

strategies.

At the level of departments and business units, risk

management processes are built into each activity. This

is either in the form of independent review activities by

persons not involved in the process or review by an

internal auditor or persons responsible for compliance.

Risk Management structures and processes are

continually reviewed to ensure, their adequacy and

appropriateness for the bank’s risk and opportunities

profile as well as bringing them up to date with changes

in strategy, business environment, evolving thoughts

and trends in risk management.

The Risk Management process has been designed in a

manner that is sufficiently rigorous and comprehensive

to give management greater insight into competing

strategic alternatives and the degree of uncertainties

associated with the alternatives and associated risks.

Risk Management processes at all levels of the

organization comprises:

• Identification;

• Assessment;

• Response and control measures; and

• Reporting.

Risk appetite is an expression of the amount of risk the

bank is prepared to take to achieve our strategic

objectives. This aligns our risk management practice

with our strategic direction. Zenith Bank is a risk

Risk Management Strategy

Risk Appetite

Risk Management structures and

processes are continually reviewed to

e n s u r e t h e i r a d e q u a c y a n d

appropriateness for the bank's risk and

opportunities profile as well as bringing

them up to date with changes in

strategy, business environment,

evolving thoughts and trends in risk

management.


conscious institution taking on risk moderately with

emphasis on protecting the Bank while increasing the

market share.

The bank employs a range of quantitative indicators to

monitor the risk profile. Specific limits have been set in

line with the bank’s risk appetite.

Strategic risk examines the impact of design and

implementation of business models and decisions, on

earnings and capital as well as the responsiveness to

industry changes. This responsibility is taken quite

seriously by the Board and Executive management of

the bank and deliberate steps are taken to ensure that

the right models are employed and appropriately

communicated to all decision makers in the bank. This

has essentially driven the bank sound banking culture

and performance to date.

Credit risk is the risk that financial loss arises from the

failure of a customer or counterparty to meet its

obligations under a contract. It arises principally from

lending, trade finance, treasury and leasing activities.

Zenith Bank has dedicated standards, policies and

procedures to control and monitor all such risks.

The Credit Risk Management Group (CRMG) is

mandated to provide high level centralized

management of credit risk for Zenith Bank. The Group

reports through the Chief Risk Officer to the Managing

Director/Chief Executive Officer and its responsibilities

include the following:

Setting the bank’s credit policies.

Establishing and maintaining Zenith Bank’s credit

exposure policy. This policy sets controls over the

maximum level of the bank’s exposure to

customers and customer groups and other credit

risk concentrations in line with internationally

accepted regulatory standards.

Performing an independent review and objective

assessment of credit risk, CRMG assesses all credit

facilities being offered to customers.

RISK MANAGEMENT ELEMENTS

Strategic Risk Management

Credit Risk Management

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w

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Reviewing the efficiency and effectiveness of credit

approval processes.

Reporting to executive management on aspects of

the bank’s loan portfolio. The Board Credit

committee and the Board receive regular

reports covering:

Risk concentrations and exposure to industry sectors;

Large customer group exposures;

Large non-performing accounts and provisions;

Acting as the primary interface for credit-related

issues on behalf of Zenith Bank with

external parties including the Central bank of

Nigeria, corporate analysts and counterparts in the

world’s major banks and non-bank financial

institutions.

It is Zenith Bank’s policy to make provisions for bad

and doubtful debts promptly when required and on a

prudent and consistent basis in accordance with

established guidelines.

Management regularly performs an assessment of the

adequacy of the established provision for bad and

doubtful debts by conducting a detailed review of the

loan portfolio.

Provision for bad and doubtful debts

The Bank's policy requires a

review of the level of specific

provisions on individual

fac i l i t i e s hav ing large

exposures at least half-yearly

or more regularly where

individual circumstances

require.





Suspended and non-accrual interest

Specific Provisions

General provisions

Write-offs

Typically, loans are designated as non-performing a

soon as management has doubts as to the

collectability of principal or interest or when

contractual payments of principal or interest are 90

days past due. When a loan is designated as non-

performing, interest is not credited to the profit and

loss account, rather either interest accruals will cease

(‘non-accrual loans’) or interest will be credited to an

interest suspense account in the balance sheet which is

netted against the relevant loan (‘suspended interest’).

On receipt of cash (other than from the realization of

security), the overall risk is re-evaluated and, if

appropriate, suspended or non-accrual interest is

recovered and taken to the profit and loss account.

Amounts received from the realization of security are

applied to the repayment of outstanding

indebtedness, with any surplus used to recover

specific provisions and then suspended interest.

There are two types of provision, specific and general,

as discuss below.

Specific provisions represent the quantification of

actual and inherent losses from individually identifies

accounts. Specific provisions are deducted from loans

and advances in the balance sheet.

The Bank’s policy requires a review of the level of

specific provisions on individual facilities having large

exposures at least half-yearly or more regularly where

individual circumstances require.

This will normally include the revalidation of collateral

held (including reconfirmation of its enforceability)

and a review of actual and anticipated receipts.

General provisions augment specific provisions and

provide cover for loans which are impaired at the

balance sheet date but which will not be identified as

such until some time in the future.

Loans (and the related provisions) are normally

charged off, either partially or in full, when there is no

realistic prospect of recovery of these amounts and

when the proceeds from the realization of security have

been received.

New specific provisions, rather than amounts charged

off, should therefore be taken as indicative of current

loss trends.

Restructuring activity is designed to maximize cash

recovery on accounts which are overdue by slowing

down the formal steps in collection management to

allow qualifying customers to repair or renegotiate

their accounts.

Zenith Bank’s provisioning policies take due account of

the increased propensity to default of restructured

accounts.

In Zenith Bank, liquidity policy is designed to ensure

that all contractual and behavioural commitments

requiring to be funded can be met out of readily

available and secure sources of funding. Funding

policy seeks to ensure that the necessary sources of

funds are available at an optimized cost.

Compliance with liquidity and funding requirements is

monitored by the Asset and Liability Management

Committee on a regular basis. This process includes:

Projecting cash flows and considering the level of

liquid assets necessary in relation thereto;

Monitoring balance sheet liquidity ratios against

internal and regulatory requirements;

Maintaining a diverse range of funding sources

with adequate back-up facilities;

Managing the concentration and profile of debt

maturities;

Monitoring depositor concentration in order to

avoid undue reliance on large individual depositors

and ensure a satisfactory overall funding mix; and

Maintaining liquidity and funding contingency

plans.

These plans identify early indicators of stress

conditions and describe actions to be taken in the event

of difficulties arising from systemic or other crises

Restructuring of loans

Liquidity and Funding Management

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while minimizing any adverse long-term implications

for the business.

Zenith Bank’s liquidity profile is VERY STRONG and our

risk management practices gives assurances that this

profile will be maintained.

Market risk is the risk that the value of the on and off-

balance sheet positions of Zenith Bank will be adversely

affected by movements in market rates or prices such

as interest rates, equity prices and/or commodity

prices resulting in a loss to earning and capital.

The Market Risk Management Unit is mandated to

assess, monitor and manage market risk for Zenith

Bank. The primary objective of the Market Risk

Management unit is to establish a comprehensive and

independent market risk control framework.

This unit is well established in the bank and

measurements and monitoring has since commenced

in our journey to implement the most robust market

risk practice in our environment.

Operational risk is the risk of loss resulting form

inadequate or failed internal processes, people and

system or from external events including legal and

regulatory risks. Operational risk exists in all products

and business activities.

Zenith Bank manages this risk through a controls-

based environment in which processes are

Market Risk Management

Operational Risk Management

documented, authorization is independent and

transactions are reconciled and monitored. This is

supported by an independent programme of periodic

reviews, undertaken by internal control & audit, and by

monitoring external operational risk events, which

ensure that Zenith Bank stays in line with best practice

and takes account of lessons learned from publicized

operational failures within the financial services

industry.

Operational risk management responsibility is

assigned at a senior management level within the

organization.

Operational risks are identified by risk

assessments covering operational risks facing

each business unit and risks inherent in processes,

activities and products.

Risk assessment incorporates a regular review of

risks identified to monitor significant changes.

Risk mitigation, including insurance, is considered

where this is cost-effective.

Insurance risk is the risk that the Group will have to

make higher than anticipated payments to settle claims

arising from its long-term and short-term insurance

businesses. Our insurance activities risk is not

significant enough to have adverse impact on the

Group’s risk profile

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Insurance Risk Management





In compliance with the Companies and Allied Matters Act 1990, the Directors have pleasure in presenting their

report on the affairs of Zenith Bank Plc, together with the audited financials for the fifteen months ended 30

September, 2008.

The Bank is engaged in the business of providing universal banking services to corporate, commercial and

individual customers which include granting of loans and advances, leases, financial advisory services, investment

banking, foreign exchange services and others.

The Bank was incorporated as a limited liability company with 100% equity ownership by Nigerians on May 30,

1990 and commenced operation on July 16, 1990. The bank became a public liability company on May 20, 2004.

The Bank’s shares are listed on the floor of the Nigerian Stock Exchange.

Macaulay Pepple – Chairman

Jim Ovia – Group Managing Director/Chief Executive

Godwin Emefiele – Deputy Managing Director

Chief Eddy M. Egwuenu – Director

Sir. S.P.O. Fortune Ebie – Director

Professor (Prince) L.F.O. Obika – Director

Sir. Steven Omojafor – Director

Babatunde Adejuwon – Director

Alhaji Baba Tela – Director (Appointed 17 July, 2007)

Peter Amangbo – Executive Director

Elias Igbinakenzua – Executive Director

Apollos Ikpobe – Executive Director

Andrew Ojei – Executive Director

Udom Emmanuel – Executive Director

The Directors’ interest in the ordinary shares of the Bank were as follows:

Name of Directors No. of Ordinary Shares held at

30/06/2007

Macaulay Pepple 2,759,665

Jim Ovia 407,232,000

Godwin Emefiele 13,969,965

Chief E. M. Egwuenu 289,645,600

Sir S. P. O. Fortune - Ebie 1,800,000

Prof. Prince L.F.O. Obika 1,631,600

Sir Steven Omojafor 856,667

Babatunde Adejuwon 1,334,266

Alhaji Baba Tella –

Peter Amangbo 3,000,000

Elias Igbinakenzua 5,206,169

Apollos Ikpobe 5,335,000

Andy Ojei 3,910,000

Udom Emmanuel 3,500,000

The Directors are statutorily responsible for the preparation of the financial statements and profit and loss

showing a true and fair view of the statement of affairs of the Bank at the end of the financial year and in compliance

Legal Form and activities during the year

Directors Who Served During the Year

Directors’ Interest in Shares

30/09/2008

3,918,973

1,594,893,427

27,457,091

413,779,426

2,639,683

2,328,409

1,518,833

2,327,522

133,803

9,285,714

11,352,353

12,621,428

9,792,857

9,999,999

Directors’ Responsibilities

DIRECTOR’S REPORT

For the Period Ended 30 September 2008

with the Companies and Allied Matters Act, 1990, and Banks and Other Financial Institutions Act, 1991, in ensuring

that:

� sufficient and adequate internal control procedures are put in place to safeguard assets, prevent and detect

fraud and irregularities.

� Proper accounting records are maintained at all times; applicable accounting standards are adhered to and

appropriate legislation complied with;

� Suitable accounting policies are adopted and consistently applied.

2007

N’000

Profit Before Tax 25,676,331

Income Tax (6,896,527)

Minority Interest’s share of (profit)/loss (102,799)

Profit Attributable to Group Shareholders 18,677,005

It is recommended that the profit after taxation for the period be appropriated as follows:

Statutory Reserve 2,626,372

Other Reserves 16,050,633

During the period, the bank changed its accounting year end from 30 June to 30 September owing to the

pronouncement by the CBN of a deferment in the unified accounting year end for banks. As a result, the financial

statements presented herein, are for fifteen months.

The shares of the Bank are held in accordance with the Articles of Association of the Bank. The Bank has no

beneficial interest in any of its shares.

Information relating to changes in fixed assets is given in note 15 to the Financial Statements.

During the period, the Bank made donations to charitable institutions, individuals and bodies amounting to

N1,661,963,179 (2007: N571,909,454). Some of the beneficiaries are :

University Of Uyo 10,000,000

UNICEF 12,000,000

The Nigerian Economic Summit 1,000,000

St. Saviour’s School, Ikoyi 17,500,000

The Energy Summit 10,000,000

Shehu Musa Yar’dua Foundation 7,000,000

Renovation Of Model Pri Sch.Gari, Kebbi 10,000,000

Refurbishment of NYSC Secretariat, Lagos 12,383,239

Red Cross Society 50,000,000

Paediatric Association Of Nigeria 1,500,000

Nigerian University Games (NUGA 2008) 50,000,000

Nigerian Basketball Federation 18,000,000

Nigeria Police Games 5,000,000

Nigeria Police Force 1,350,250

Nigeria Cup Golf Tournament 1,000,000

Nigeria Leadership Initiative 5,000,000

Result of Operations

2008

N’000

56,118,708

(4,126,469)

(383,684)

51,608,555

6,978,749

44,629,806

Change in Accounting Year End

Acquisition of Own Shares

Fixed Assets

Charitable Gifts


DIRECTOR’S REPORT


DIRECTOR’S REPORT



Nigeria Stock Exchange 7,020,000

Newswatch Talent Hunt 5,000,000

Nelson Mandela Institute 10,000,000

National Hospital, Abuja 5,000,000

National Health Insurance Scheme 50,000,000

Musical Society Of Nigeria 46,691,369

Ministry of Commerce & Industry 1,000,000

Lagos State Economic Summit Group 25,000,000

Kidney Dialysis Trust Fund 5,000,000

Kanu Heart Foundation 1,000,000

Institute Of Chartered Accountants Of Nigeria 20,000,000

IMF/Worlbank Summit 8,800,000

ICT Centre, Canaan Land, Otta 13,741,037

Growing Business Foundation 30,000,000

Flood Victims At Maiduguri 5,000,000

Federal Radio Corporation Of Nigeria (Frcn) 500,000

Federal Capital Territory 10,000,000

Federal Capital Territory Authority Arts & Culture 70,000,000

Flood Disaster In Plateau 15,000,000

Adamawa Flood Victims 10,000,000

Debt Management Office (DMO) 10,000,000

Council For The Regulation Of Engineering In Nigeria 25,000,000

It is expected that the Bank will be able to improve on its performance in the years ahead. The Bank is, on a

continuous basis, carrying out research into new banking products and services.

The Bank’s employment policy is based entirely on merit and the individual’s ability to perform. However, during

the year under review, no disabled persons met the bank’s criteria.

The Bank places high premium on consultation with employees on matters affecting them.

Formal and informal channels of communication are employed in keeping the staff aware of various factors

affecting the performance of the Bank. So far, the Bank has utilized the facilities of various local and international

training institutions and organizations.

PricewaterhouseCoopers have indicated their willingness to continue in office in accordance with Section 357(2) of

the Companies & Allied Matters Act, 1990.

Dated this 28th day of October, 2008.

By Order of the Board

MICHAEL O. OTU

Company Secretary

Research and Development

Employment of Disabled Persons

Employee Involvement and Training

Auditors

REPORT OF THE AUDIT COMMITTEE

In compliance with section 359(6) of the Companies and Allied Matters Act 1990, we have reviewed the Audit

Report for the year ended 30th September, 2008 and hereby state as follows:

1. The scope and planning of the audit were adequate in our opinion.

2. The accounting and reporting policies of the bank conformed with statutory requirements and agreed ethical

practices.

3. The internal control system was being constantly and effectively monitored; and

4. The external auditors' management controls report received satisfactory response from Management.

5. Related party transactions and balances have been disclosed in note 24 to the Financial Statement in

accordance with the Central Bank of Nigeria (CBN) circular BSD/1/2004.

Dated October 28, 2008.

Alhaji Hamis B. Musa

Chairman, Audit Committee

MEMBERS OF THE COMMITTEE

1. Alhaji Hamis B. Musa

2. Mr. Alade Akesode

4. Chief Eddy Egwuenu


6. Prof. (Prince) L.F.O. Obika

6. Ms. Angela Agidi

REPORT OF THE AUDIT COMMITTEE



AUDITOR’S REPORT


252E Muri Okunola Street,Victoria Island, P. O. Box 2419Lagos, Nigeria.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF ZENITH BANK PLC

Report on the financial statements

Directors’ responsibility for the financial statements

Auditor’s responsibility

Opinion

We have audited the accompanying consolidated financial statements of Zenith Bank Plc (the bank) and its

subsidiaries (together, the group) which comprise the balance sheet as of 30 September 2008 and the profit and

loss account and cash flow statement for the fifteen months period then ended and a summary of significant

accounting policies and other explanatory notes.

The directors are responsible for the preparation and fair presentation of these financial statements in accordance

with Nigerian Statements of Accounting Standards and with the requirements of the Companies and Allied Matters

Act 1990 and the Banks and Other Financial Institutions Act 1991. This responsibility includes: designing,

implementing and maintaining internal control relevant to the preparation and fair presentation of financial

statements that are free from material misstatement, whether due to fraud or error; selecting and applying

appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Our responsibility is to express an independent opinion on the financial statements based on our audit. We

conducted our audit in accordance with International Standards on Auditing. Those standards require that we

comply with ethical requirements and plan and perform our audit to obtain reasonable assurance that the financial

statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the

financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of

the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk

assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the

financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the

purpose of expressing an opinion on the effectiveness of the company’s internal control. An audit also includes

evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made

by the directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

In our opinion, the accompanying financial statements give a true and fair view of the state of the financial affairs of

the group and of the bank at 30 September 2008 and of the profit and cash flows of the group and of the bank for

the period then ended in accordance with Nigerian Statements of Accounting Standards, the Companies and Allied

Matters Act 1990 and the Banks and Other Financial Institutions Act 1991.

Report on other legal requirements

The Companies and Allied Matters Act 1990 and the Banks and Other Financial Institutions Act 1991 require that in

carrying out our audit we consider and report to you on the following matters. We confirm that:

(i) we have obtained all the information and explanations which to the best of our knowledge and belief were

necessary for the purposes of our audit;

(ii) in our opinion proper books of account have been kept by the bank, so far as appears from our examination of

those books;

(iii) the bank’s balance sheet and profit and loss account are in agreement with the books of account;

(iv) our examination of loans and advances was carried out in accordance with the Prudential Guidelines for

licensed banks issued by the Central Bank of Nigeria;

(v) related party transactions and balances are disclosed in Note 24 to the financial statements in accordance with

the Central Bank of Nigeria Circular BSD/1/2004;

(vi) the bank contravened certain regulations of the Banks and Other Financial Institutions Act 1991 during the

year as explained in note 32 to the financial statements;

(vii) except for the contraventions disclosed in Note 32 to the financial statements, the bank has complied with the

requirements of the relevant circulars issued by the Central Bank of Nigeria.

Chartered Accountants,Lagos, Nigeria.

30 October, 2008

AUDITOR’S REPORT




STATEMENT OF ACCOUNTING POLICIES


The principal accounting policies adopted in the preparation of these financial statements are set out below. These

policies have been consistently applied to all years presented, unless otherwise stated.

The financial statements are prepared in accordance with, and comply with the relevant Statements of Accounting

Standard issued by the Nigerian Accounting Standards Board. The financial statements have been prepared in

accordance with the going concern principle under the historical cost convention. The accounting policies adopted

in the preparation of these financial statements are consistent with those adopted in the previous years.

Subsidiary undertakings, which are those companies in which the group, directly or indirectly, has an interest of

more than one half of the voting rights or otherwise has control over the operations have been consolidated.

Subsidiaries are consolidated from the date on which effective control is transferred to the group. Intercompany

transactions, balances and unrealized surpluses and deficits on transactions between group companies have been

eliminated. Accounting policies of subsidiaries conform to the policies adopted by the group for its banking and

non banking operations. Accounting policies between banking and non banking operations have been aligned to

the extent that it is material and appropriate for the specific industry.

Investments in subsidiaries are accounted for at cost in the bank’s books. The carrying amounts of these

investments are reviewed annually and written down for impairment where considered necessary.

Items included in the financial statements of each of the group’s entities are measured using the currency of the

primary economic environment in which the entity operates (functional currency). The parent entity’s functional

currency (Nigerian Naira) is adopted for the consolidated financial statements.

The results and financial position of all foreign subsidiaries that have a functional currency different from the

group’s presentation currency (Nigerian Naira) are translated into the presentation currency as follows:

! assets and liabilities are translated at the closing rate on the balance sheet date; and! income and expenses for each income statement are translated at average exchange rates for the period,.

On consolidation, exchange differences arising from the translation of the net investment in foreign operations are

credited to a Foreign Currency Translation reserve account. On disposal of any part or a whole foreign subsidiary,

such exchange differences are recognised in the income statement as part of the profit or loss on disposal.

Foreign currency transactions are translated into Nigerian Naira using the exchange rates prevailing at the date of

the transactions. Assets and liabilities at the balance sheet date denominated in foreign currencies are translated

into Nigerian Naira at rates ruling at that date. Foreign exchange gains and losses resulting from the settlement of

such transactions and from the translation at year end exchange rates are recognised in the profit and loss account

in the year in which they arise.

Interest income and expense are recognised in the profit and loss account for all interest bearing instruments on an

accrual basis using the effective yield method based on the outstanding principal. Interest income includes

coupons earned on fixed income investment and trading securities and accrued discount and premium on treasury

bills and other discounted instruments. When loans and advances become doubtful of collection, they are written

down to their recoverable amounts and interest income is thereafter recognised only when cash is received.

a. Basis of preparation

b. Basis of consolidation

c. Foreign currency translations

Functional and presentation currency

Foreign subsidiaries

Parent company and local subsidiaries

d. Recognition of interest income and expense

e. Recognition of fees, commissions and other income

f. Loans and advances and provisions for loan impairment

g. Advances under finance lease

h. Fixed assets

i. Income tax

Fees and commissions, where material, are amortised over the life of the related service. Otherwise fees,

commissions and other income are recognised as earned upon completion of the related service.

Loans and advances are recognised when cash is advanced to borrowers.

A provision for loan impairment is established if there is objective evidence that the bank will not be able to collect

all amounts due according to the original contractual terms of the credit. The amount of the provision is

determined in accordance with the Prudential Guidelines issued by the Central Bank of Nigeria.

In addition, a provision of 1% minimum is made for all performing accounts to recognise losses in respect of risks

inherent in any credit portfolio.

Advances under finance lease are stated net of unearned lease finance income. Lease finance income is amortised

over the lease period to achieve a constant rate of return on the outstanding net investment.

Fixed Assets are stated at historical cost less depreciation. Subsequent costs are included in the asset’s carrying

amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits

associated with the item will flow to the bank and other members of the group, and the cost of the item can be

measured reliably. All other repairs and maintenance are charged to the profit and loss account during the financial

period in which they are incurred.

Depreciation is calculated on the straight line basis to write down the cost of each asset to its residual values over

its estimated useful life as follows:

Motor vehicles - 25%

Furniture, fittings and equipment - 20% - 25%

Computer equipment - 33 1/3%

Leasehold improvement - 20% (or period of primary lease where shorter)

Leasehold land and buildings - 2% (or the period of the lease, if shorter)

Costs related to fixed assets under construction or in the course of implementation are disclosed as work-in-

progress. The attributable costs of each asset is transferred to the relevant category immediately the asset is put

into use and depreciated accordingly.

Gains and losses on disposal of fixed assets are determined by reference to their carrying amount and are taken

into account in determining operating profit.

Income tax expense is the aggregate of the charge to the profit and loss account in respect of current income tax,

education tax, information technology development tax and deferred income tax.

Current income tax is the amount of income tax payable on the taxable profit for the period determined in

accordance with the Companies Income Tax Act (CITA). Education tax is assessed at 2% of the chargeable profits

whilst information technology development tax is assessed at 1% of profit before tax..

Deferred income tax is provided in full, using the liability method, on all temporary differences arising between the

tax bases of assets and liabilities and their carrying values for financial reporting purposes. Deferred income tax is

determined using tax rates enacted or substantively enacted at the balance sheet date and are expected to apply

when the related deferred income tax liability is settled.





Deferred income tax assets are recognised only to the extent that it is probable that future taxable profits will be

available against which the temporary differences can be utilised.

Investment securities comprise debt and equity securities which are classified as short term and long term

investments. Investment securities intended to be held for an indefinite period of time, which may be sold in

response to needs for liquidity or changes in interest rates, exchange rates or equity prices are classified as long

term investments. Debt and equity securities held for a period not exceeding one year are classified as short term

investments. Management determines the appropriate classification of its investments at the time of the

purchase.Investment securities are initially recognised at cost. Short term investments are subsequently re-

measured at fair value based on market values.

Interest earned whilst holding investment securities is reported as interest income. Dividends receivable are

included separately in dividend income when a dividend is declared. A change in market value of investment

securities is not taken into account unless it is considered to be permanent.

Investments in subsidiaries are carried in the bank’s balance sheet at cost less provisions for impairment losses.

Where, in the opinion of the Directors, there has been impairment in the value of an investment, the loss is

recognised as an expense in the period in which the impairment is identified.

On disposal of an investment, the difference between the net disposal proceeds and the carrying amount is

charged or credited to the profit and loss account.

Contingent liabilities arising from performance bonds, guarantees issued on behalf of customers in the ordinary

course of business, and on-lending facilities are reported off-balance sheet in recognition of the risk inherent in

those transactions. Commissions and charges on these transactions are recognised as earned on issuance of the

bond or guarantee.

Retirement benefits are accrued and charged to the profit and loss account in the year they are incurred.

Provisions are recognised when the separate entities in the group have a present or constructive obligation as a

result of past events and it is probable that an outflow of resources embodying economic benefits will be required

to settle the obligation and reliable estimate of the amount of the obligation can be made.

Business segments are distinguishable components of the Group that provide products or services that are subject

to risks and rewards that are different to those of other business segments. Geographical segments provide

products or services within a particular economic environment that is subject to risks and rewards that are

different to those of components operating in other economic environments. Business segments are the primary

reporting segments.

Group costs are allocated to segments on a reasonable and consistent basis. Transactions between segments are

generally accounted for in accordance with Group policies as if the segment were a stand-alone business with intra-

segment revenue and costs being eliminated in Head office.

The analyses by geographical segment are based on the location of the customer.

j. Investment securities

k. Investments in subsidiaries

l. Off- Balance sheet transactions

m. Retirement Benefits

n. Provisions

o. Segment reporting



12 Months 12 Months

Group Bank

2007 2007

N’000 N000

Notes

Interest income 2 63,624,930 62,017,026

Interest expense 3 (19,038,744) (18,733,167)

Net interest income 44,586,186 43,283,859

Bad and doubtful debt expense 9 (c) (1,832,283) (1,783,325)

Other operating income 4 31,255,183 27,176,754

Operating expenses 5 (48,332,755) (45,388,460)

Profit before tax 25,676,331 23,288,828

Income tax 6 (6,896,527) (5,779,683)

Profit after tax 18,779,804 17,509,145

Minority Interest 22 (102,799) –

Profit attributable to Group Shareholders 18,677,005 17,509,145

Transfer to statutory reserve 21 (2,626,372) (2,626,372)

Transfer to bonus issue reserve 21 (1,158,191) (1,158,191)

Transfer to contingency reserve 21 (115,953) –

Transfer to general reserve 21 14,776,489 13,724,582

Earnings per share (basic) 30 202 k 189 k

Earnings per share (adjusted) 30 112 k 105 k

The accounting policies on pages 41 to 43, and the notes on pages 47 to 68 form an integral part of these financial

statements.

15 Months 15 Months

Group Bank

2008 2008

N’000 N’000

142,390,280 137,814,567

(53,598,072) (49,962,969)

88,792,208 87,851,598

(6,326,832) (6,077,405)

65,903,501 52,260,467

(92,250,169) (85,094,715)

56,118,708 48,939,945

(4,126,469) (2,414,954)

51,992,239 46,524,991

(383,684) –

51,608,555 46,524,991

(6,978,749) (6,978,749)

– –

(102,644) –

44,527,162 39,546,242

383 k 345 k

308 k 278 k

PROFIT & LOSS ACCOUNTS





Group BankJune June

2007 2007N’000 N’000

Note

AssetsCash and short-term funds 7 574,957,394 563,581,290Loans and advances 8 288,111,826 218,305,419Other facilities 10(a) 4,701,891 4,701,891Advances under finance lease 11 2,444,566 2,444,566Other assets 12 24,177,368 14,839,588Deferred tax asset 13 120,394 –Investments 14 41,629,665 45,524,242Fixed assets 15 36,799,420 34,543,930

Total assets 972,942,524 883,940,926

Liabilities

Deposits 16 634,492,524 568,012,091Other facilities 10(b) 4,749,385 4,749,385Other liabilities 17 187,633,438 170,087,697Current income tax 6 6,427,141 5,124,697Deferred income tax liability 18 1,237,665 1,186,018Borrowings 19 21,947,715 21,947,715

Total liabilities 856,487,868 771,107,603

Capital and reserves

Share capital 20 4,632,762 4,632,762Share premium 21 69,237,062 69,237,062Statutory reserve 21 9,899,152 9,899,152SMEEIS reserve 21 3,729,204 3,729,204General reserve 21 25,291,131 24,176,952Contingency reserve 21 159,530 –Revaluation reserve 79,437 –Reserve for bonus issues 21 1,158,191 1,158,191Foreign currency translation reserve 21 399,621 –

114,586,090 112,833,323

Minority interest 22 1,868,566 –

Total shareholders’ equity 116,454,656 112,833,323

Liabilities and equity 972,942,524 883,940,926Confirmed credits and other obligations on behalf of customers 27(b) 298,138,069 294,444,783

Total assets plus contingents 1,271,080,593 1,178,385,709

The financial statements and notes on pages 44 to 68 were approved by the Board of Directors on 28 October 2008 and signed on its behalf by:

Macaulay Pepple (Chairman)

Jim Ovia (Group Managing Director and Chief Executive)

The accounting policies on pages 41 to 43, and the notes on pages 47 to 68 form an integral part of these financial statements.

Group BankSeptember September

2008 2008N’000 N’000

1,176,302,666 1,108,827,501445,837,390 413,731,491

5,801,093 5,801,0934,677,569 3,890,435

40,326,339 29,667,893160,434 –

63,783,624 70,297,91650,942,583 48,085,676

1,787,831,698 1,680,302,005

1,185,892,673 1,161,475,5135,859,690 5,859,690

207,242,095 134,462,2375,690,073 3,549,1131,959,877 1,901,667

34,569,647 34,569,647

1,441,214,055 1,341,817,867

8,372,398 8,372,398255,046,965 255,046,965

16,877,901 16,877,9013,729,204 3,729,204

60,552,769 54,457,670261,292 –322,292 –

- – (814,576) –

344,348,245 338,484,138

2,269,398 –

346,617,643 338,484,138

1,787,831,698 1,680,302,005

724,297,739 704,386,584

2,512,129,437 2,384,688,589

BALANCE SHEET

Group Bank

2007 2007

Notes N’000 N’000

Cash generated from operations 28 253,179,324 247,059,463

Corporate tax paid (3,991,739) (3,776,104)

Net cashflows from operating activities 249,187,585 243,283,359

Purchase of fixed assets 15 (17,572,651) (15,940,295)

Proceed from sale of fixed assets 217,711 20,984

Small and Medium Scale Industries

- investments in SMEEIS (178,808) (178,808)

- divestments from SMEEIS – –

Proceeds from Sale of investment – –

Increase in other investments (3,186,246) –

Investment in subsidiaries – (8,806,650)

Purchase of government bonds (27,013,403) (21,695,950)

Net cash used in investing activities (47,733,397) (46,600,719)

Dividend paid (6,600,000) (6,600,000)

Net proceeds from issue of shares 1,523,513 1,523,513

Borrowed funds

- inflow from long term borrowing 9,197,715 9,197,715

- repayment of long term borrowing – –

Receipt of other facilities 2,486,260 2,486,260

Minority interest’s contribution to equity 1,729,350 –

Net cash (used in)/generated from

financing activities 8,336,838 6,607,488

Increase in cash and short-term funds 209,791,026 203,290,128

Cash and short term funds at

Start of period 365,166,368 360,291,162

Cash and short term funds at end of period 574,957,394 563,581,290

The accounting policies on pages 41 to 43, and the notes on pages 47 to 68 form an integral part of these financial

statements.

Group Bank

2008 2008

N’000 N’000

Operating activities

458,017,208 402,349,288

(4,159,420) (3,274,889)

453,857,788 399,074,399

Investing activities

(23,263,103) (22,048,244)

156,334 155,916

(383,029) (383,029)

426,347 426,347

140,912 140,912

(12,013,473) (6,365,525)

– (3,491,100)

(10,434,565) (15,121,527)

(45,370,577) (46,686,250)

Financing activities

(9,265,524) (9,265,524)

188,391,348 188,391,349

15,323,440 15,323,440

(2,701,508) (2,701,508)

1,110,305 1,110,305

– –

192,858,061 192,858,062

601,345,272 545,246,211

574,957,394 563,581,290

1,176,302,666 1,108,827,501


STATEMENT OF CASH FLOWS



NOTES TO THE FINANCIAL STATEMENTS


1 The Bank

Group Bank15 Months to 15 Months to

September 2008 September 2008

N’000 N’000 2 Interest income

43,571,574 42,492,98192,116,134 89,302,419

5,826,866 5,143,461875,706 875,706

142,390,280 137,814,5673 Interest Expense

53,295,922 49,956,260302,150 6,709

53,598,072 49,962,9694 Other operating income

17,351,732 11,782,5865,764,058 5,013,450

30,072,360 29,159,92912,715,351 6,304,502

65,903,501 52,260,467

5 Operating expenses

33,942,330 31,562,7209,026,242 8,396,014

151,000 108,000493,702 272,145(45,432) (45,432)

(7,415) 20,248

48,689,742 44,781,021

92,250,169 85,094,715

Zenith Bank Plc was incorporated as Zenith International Bank Limited, a private limited liability company on 30 May, 1990 and was granted a banking licence in June 1990. The bank which is wholly owned by Nigerian citizens, commenced operations on 16 June 1990. The name of the bank was changed to Zenith Bank Plc on 20 May 2004, to reflect its status as a Public Limited Liability Company.

The Bank has ten subsidiary companies namely, Zenith Securities Limited, Zenith General Insurance Company Limited, Zenith Bank (Ghana) Limited, Zenith Pension Custodian Limited, Zenith Bank (UK) Limited, Zenith Capital Limited, Zenith Registrars Limited, Zenith Medicare Limited, Zenith Trust Company Limited and Zenith Life Assurance Company Limited. The results of these subsidiaries have been consolidated in these financial statements. The Bank also acquired significant shareholding in seven companies incorporated in Nigeria, Qubit Spectrum Limited, Venus Telecom Limited, Cyberspace Networks Limited and Omatek Computers Limited under the Small and Medium Enterprises Equity Investment Scheme (SMEEIS).

Group Bank12 Months to 12 Months to

June 2007 June 2007

N’000 N’000

Placements and short-term funds 18,418,956 17,921,729Loans and advances 41,247,672 40,567,224Government bonds 3,605,366 3,175,137Advances under finance lease 352,936 352,936

63,624,930 62,017,026

Customer deposits 18,905,883 18,680,221Other banks’ deposits 132,861 52,946

19,038,744 18,733,167

Fees 8,258,144 6,398,986Foreign exchange earnings 2,216,580 2,064,414Commissions 16,885,644 16,684,699Other Income 3,894,815 2,028,655

31,255,183 27,176,754

Staff costs (Note 25) 14,650,542 13,733,641Depreciation (Note 15) 4,793,569 4,481,864Auditors’ remuneration 94,342 72,000Directors’ emoluments (Note 26) 314,460 181,430Profit on disposal of fixed assets (4,008) (4,144)

(Profit)/ loss on disposal of investment ( See Note (i)) – –

Other expenses 28,483,850 26,923,669

48,332,755 45,388,460

(I) Included in operating expenses is the amount of N7,415,000 and N20,248,000 representing the gain and loss to the Group and Bank respectively (2007: Group and Bank -NIL) for the disposal of 10% of the bank’s equity ownership in Zenith Bank (Ghana) Limited.



Group Bank

2007 2007

N’000 N’000

Current income tax 5,727,233 4,643,134

Information technology tax – –

Education tax 584,900 481,562

Prior period over-provision (81,153) (81,153)

6,230,980 5,043,543

Deferred income tax charge (Note 18) 785,941 736,140

Reversal during the period (Note 13) (120,394) –

Charge for the period 6,896,527 5,779,683

The movement in the current income tax payable balance is as follows:

At start of the period 4,191,372 3,857,258Tax paid (3,991,739) (3,776,104)Tax effect of translation (3,472) –Prior period over-provision (81,153) (81,153)Income tax charge 6,312,133 5,124,696

At end of the period 6,427,141 5,124,697

Cash 26,668,578 26,414,781

Balances with other banks

Central banks 84,386,418 79,087,884

Local banks 3,920,377 –

Banks outside Nigeria 123,485,021 122,801,523

Short term funds

Placements with local banks 358,702 –

Treasury bills 249,815,102 249,815,102

Secured treasury placement 86,323,196 85,462,000

574,957,394 563,581,290

Included in balances with banks outside Nigeria is the amount of N65,892,939,000 and N65,353,040,000 for the

Group and Bank respectively (2007: N 120,096,813,000 and N 119,967,325,000) which represents the Naira value of

foreign currency bank balances held on behalf of customers in respect of letters of credit. The corresponding

liabilities are included in other liabilities (See Note 17).

Group Bank

2008 2008

N’000 N’000

6 Income tax

4,145,907 2,561,272

546,507 492,780

614,475 495,060

(1,849,807) (1,849,807)

3,457,082 1,699,305

723,575 715,649

(54,188) –

4,126,469 2,414,954

6,427,141 5,124,697(4,159,420) (3,274,889)

(34,730) –(1,849,807) (1,849,807)

5,306,889 3,549,112

5,690,073 3,549,113

7 Cash and short-term funds

28,541,680 27,758,461

211,020,436 204,509,429

308,191 –

147,589,972 178,421,418

164,725,646 78,566,000

400,966,741 396,422,193

223,150,000 223,150,000

1,176,302,666 1,108,827,501





Group Bank

2007 2007

N’000 N’000

Overdrafts 170,810,035 106,772,949

Term loans 61,681,539 56,179,164

Commercial papers 38,940,711 38,621,996

Other loans 22,772,809 22,772,809

294,205,094 224,346,918

Provision for loan losses and interest in

suspense (Note 9) (6,093,268) (6,041,499)

288,111,826 218,305,419

The nature of security in respect of loans and advances is as follows:

Secured against real estate 63,645,361 63,645,361

Otherwise secured 108,987,768 108,987,768

Unsecured 121,571,965 51,713,789

294,205,094 224,346,918

The performance of loans and advances is analysed as follows:

Performing 290,182,717 220,324,541

Sub-standard 67 67

Doubtful 1,258,454 1,258,454

Lost 2,763,856 2,763,856

294,205,094 224,346,918

Group Bank

2008 2008

N’000 N’000

8 Loans and advances

201,588,635 188,484,464

97,269,664 78,773,593

124,696,912 123,871,427

36,010,662 36,010,662

459,565,873 427,140,146

(13,728,483) (13,408,655)

445,837,390 413,731,491

231,086,853 231,086,853

141,709,322 141,709,322

86,769,698 54,343,971

459,565,873 427,140,146

450,002,460 417,735,226

250,857 165,860

1,088,778 1,048,177

8,223,778 8,190,883

459,565,873 427,140,146

9 Movement in provision for loan losses and interest in suspense

a Group

2008 2008 2008N'000 N'000 N'000

3,393,090 155,730 3,548,8202,544,448 0 2,544,448

5,937,538 155,730 6,093,268

3,040 – 3,040

4,419,347 1,373,846 5,793,193 1,838,982 – 1,838,982

– – –

7,717,319 1,529,576 9,246,8954,481,588 0 4,481,588

12,198,907 1,529,576 13,728,483

b Bank

2008 2008 2008N'000 N'000 N'000

3,393,090 155,730 3,548,8202,492,679 0 2,492,679

5,885,769 155,730 6,041,499

4,324,229 1,358,254 5,682,483 1,684,673 – 1,684,673

– – –

7,717,319 1,513,984 9,231,3034,177,352 0 4,177,352

11,894,671 1,513,984 13,408,655

Provision for loan losses Interest in suspense Total Total

2007 2007 2007N'000 N'000 N'000

At start of the periodNon-performing 2,144,460 187,381 2,331,841

Performing 2,020,289 – 2,020,289

4,164,749 187,381 4,352,130

Exchange Difference ontranslation of opening balance – – –

Additional provision: Non-performing 1,351,698 (31,651) 1,320,047 Performing 524,159 – 524,159

Provision no longer required (103,068) – (103,068)

At end of the period Non-performing 3,393,090 155,730 3,548,820 Performing 2,544,448 – 2,544,448

5,937,538 155,730 6,093,268

Provision for loan losses Interest in suspense Total Total

2007 2007 2007N'000 N'000 N'000

At start of the periodNon-performing 2,144,460 187,381 2,331,841

Performing 2,017,478 – 2,017,478

4,161,938 187,381 4,349,319

Additional provision: Non-performing 1,351,698 (31,651) 1,320,047 Performing 475,201 – 475,201

Provision no longer required (103,068) – (103,068)

At end of the period Non-performing 3,393,090 155,730 3,548,820 Performing 2,492,679 – 2,492,679

5,885,769 155,730 6,041,499







Group Bank

June 2007 June 2007

N'000 N'000

The charge/ (credit) for the period is analysed as follows:

Loans and advances:

Non-performing 1,351,698 1,351,698

Performing 524,159 475,201

Afrexim Facility 47,494 47,494

Provision no longer required (103,068) (103,068)

Leases (Note 11 12,000 12,000

1,832,283 1,783,325

A The outstanding balance as at period end is as follows

At start of the period 4,749,385 4,749,385

Less: 1% Provision (47,494) (47,494)


b The movement on this account during the period was as follows:


Additional funds during the period 2,486,260 2,486,260


c The movement on general provision for Afrexim Loans during the period was as follows:

At start of the period – –

Provisions made during the period 47,494 47,494

At end of the period 47,494 47,494

The Afrexim facility represents $49,798,924 (2007: $37,458,671) disbursed to customers of the bank on behalf of

African Export Import Bank (AFREXIM)

a Gross investment 2,836,649 2,836,649

Less: Unearned income (362,586) (362,586)

Net Investment 2,474,063 2,474,063

Provision for advances under finance lease (b) (29,497) (29,497)

2,444,566 2,444,566

Group Bank


9 (c)Bad and doubtful debt expense N'000 N'000

4,419,347 4,324,229

1,838,982 1,684,673

11,103 11,103

– –

57,400 57,400

6,326,832 6,077,405

10 Other Facilities

5,859,690 5,859,690

(58,597) (58,597)

5,801,093 5,801,093

4,749,385 4,749,385

1,110,305 1,110,305

5,859,690 5,859,690

47,494 47,494

11,103 11,103

58,597 58,597

11 Advances under finance lease

11,485,366 10,587,272

(6,720,900) (6,609,940)

4,764,466 3,977,332

(86,897) (86,897)

4,677,569 3,890,435

Group Bank

June 2007 June 2007

N'000 N'000

b Movement in provision for advances under finance lease

At start of the period

-Performing 17,497 17,497

Additional


At end of the period


Accrued interest 2,865,785 2,554,441

Prepayments 12,515,264 11,977,220

Sundry receivables 9,078,319 589,927

Less: Provision for other assets (282,000) (282,000)

24,177,368 14,839,588

At start of the period – –

Tax credit during the period (Note 6) 120,394 –

Tax effect of translation – –

At end of the period 120,394 –

a Investment in Government Securities

FGN Bonds- Trading (Note (i)) – –

Federal Government Bond -Held to Maturity (Note (ii)) 35,152,415 28,995,950

Ghana Government Bond -Held to Maturity (Note (iii)) – –

Lagos State Government Bond (Note (iv)) 125,000 125,000

Edo State Revenue Bond 1,667 1,667

35,279,082 29,122,617

b Investment in subsidiaries and affiliates

Zenith Securities Limited – 399,670

Zenith General Insurance Company Limited – 3,977,548

Zenith Registrars Limited – 50,000

Zenith Bank (Ghana) Limited – 1,611,600

Zenith Pension Custodian Limited – 1,980,000

Zenith Life Assurance Company Limited – 150,000

Zenith Bank (UK) Limited – 5,036,000

Zenith Capital Limited – 400,000

– 13,604,818

Group Bank


N'000 N'000

29,497 29,497

57,400 57,400

86,897 86,897

12 Other assets

6,642,506 6,177,834

23,109,733 22,456,360

14,655,567 5,115,166

(4,081,467) (4,081,467)

40,326,339 29,667,893

13 Deferred tax asset

120,394 –

54,188 –

(14,148) –

160,434 –

14 Investments

864,421 –

44,119,144 44,119,144

605,082 –

125,000 125,000

– –

45,713,647 44,244,144

– 399,670

– 3,977,548

– 50,000

– 1,450,440

– 1,980,000

– 150,000

– 8,527,100

– 400,000

– 16,934,758







Group Bank

June 2007 June 2007

N'000 N'000

C Investment in Small and Medium Enterprises

Venus Telecom Limited 100,000 100,000

Cyberspace Networks Limited 240,000 240,000

Qubit Spectrum Limited 100,000 100,000

Interswitch Limited 10,420 10,420

Omatek Computers Limited 159,951 159,951

Reliance Agro Limited 5,000 5,000

ATM Consortium 20,000 20,000

Best Foods Global 20,000 20,000

Emoota Farms 40,000 40,000

Living Witness 15,000 15,000

Richland Industries Limited 2,000 2,000

Accion Microfinance Limited 59,207 59,207

Socketworks Limited 60,000 60,000

Ondo Plastics Industries Limited 37,440 37,440

Cards Plant Limited 105,000 105,000

Africorp Projects Limited 80,000 80,000

Tinapa Business Resort Limited 250,000 250,000

Trust Hospital Limited 50,000 50,000

Frezone Plant Fabrication International Limited 100,000 100,000

Tempo & Packaging Limited 624,230 624,230

Ibad Limited 430,000 430,000

Flex Med- Care International Limited 200,000 200,000

De-Royal Mark Limited 6,000 6,000

Iven Tech Limited 12,000 12,000

Obagayan Farms Limited – –

Aluminium Solutions Limited – –

CR Services Limited – –

2,726,248 2,726,248

Investments

Smartcard Nigeria Plc 12,726 12,726

Nigeria Global Revenue Fund 5,250 5,250

Nigerian Interbank Settlement System 52,583 52,583

Africa Finance Corporation – –

Investments held by subsidiaries (Note (v)) 3,553,775 –

3,624,334 70,559

6,350,582 16,401,625

Total investments 41,629,665 45,524,242

(i) FGN bonds- trading comprise:

2nd FGN Bond Series 7 (17%) – –

3rd FGN Bond Series 12 (12 %) – –

3rd FGN Bond Series 15 (10.98 %) – –

4th FGN Bond Series 9 (9.35%) – –

4th FGN Bond Series 10 (9.50%) – –

– –

Group Bank


N'000 N'000

100,000 100,000

240,000 240,000

100,000 100,000

10,420 10,420

– –

5,000 5,000

20,000 20,000

20,000 20,000

40,000 40,000

15,000 15,000

2,000 2,000

92,246 92,246

60,000 60,000

37,440 37,440

105,000 105,000

66,562 66,562

250,000 250,000

50,000 50,000

100,000 100,000

476,228 476,228

325,044 325,044

200,000 200,000

6,000 6,000

12,000 12,000

230,000 230,000

20,000 20,000

99,990 99,990

2,682,930 2,682,930

12,726 12,726

5,250 5,250

52,583 52,583

6,365,525 6,365,525

8,950,963 –

15,387,047 6,436,084

18,069,977 26,053,772

63,783,624 70,297,916

40,000 –

102,860 –

500,000 –

168,380 –

96,439 –

864,421 –

(ii) As at 1 July 2007, the Bank held investments aggregating to N 28,995,000,000 (2007: N 7,000,000,000) in eight

different tranches of Federal Government Bond. These Bonds have varying maturity dates and attract interest rates

ranging between 9% and 16% per annum. During the period, the Bank invested more funds amounting to

N16,316,000,000 in additional Federal Government Bonds. These have varying maturity dates and interest rates.

(iii) During the period, Zenith UK Limited invested an amount of GBP 2,790,957 (N605,082,334) in Ghana Government

Bonds (2007: NIL). The bond which is due to mature October 2017 is priced at 8.5% per annum.

(iv) This represents the Bank's investment in Lagos State floating rate redeemable bond (2005/2009). The redeemable

bond is priced at the higher of 4% above Central Bank of Nigeria's (CBN) treasury bills' rate and CBN Certificate rate

plus 1% per annum.

The investments in Small and Medium Enterprises represent the bank's disbursement of funds under the Policy

Guidelines for 2001 Fiscal Year (Monetary Policy Circular No. 35).




15 Fixed assets

a. Group

At 30 September 2008 14,897,447 3,447,715 8,867,574 3,630,713 4,741,533 15,357,601 50,942,583

Furniture,

Leasehold Leasehold fittings Computer Motor Work in

land & building improvement & equipment equipment vehicles progress Total

N'000 N'000 N'000 N'000 N'000 N'000 N'000

Cost

At start of the period 12,073,431 6,294,617 10,614,303 5,958,572 6,392,246 10,328,132 51,661,301

Additions 3,570,567 2,152,473 5,441,938 3,517,093 3,551,563 5,029,469 23,263,103

Reclassifications 96,788 (68,415) (26,514) (1,859) – – –

Disposals (45,456) (12,992) (197,113) (35,377) (470,601) – (761,539)

At end of the period 15,695,330 8,365,683 15,832,614 9,438,429 9,473,208 15,357,601 74,162,865

Accumulated depreciation

At start of the period 410,364 3,312,347 4,310,603 3,579,206 3,249,361 – 14,861,881

Exchange Difference on

translation of opening

balance 29,026 (38,645) (2,644) 2,263 (7,204) – (17,204)

Charge for the period 331,805 1,687,241 2,850,384 2,255,034 1,901,778 – 9,026,242

Reclassifications 28,804 (28,700) (411) 307 – – –

Disposals (2,116) (14,275) (192,892) (29,094) (412,260) – (650,637)

At end of the period 797,883 4,917,968 6,965,040 5,807,716 4,731,675 – 23,220,282

Net book amount

At 30 June 2007 11,663,067 2,982,270 6,303,700 2,379,366 3,142,885 10,328,132 36,799,420




b. Bank

At 30 September 2008 14,339,357 3,104,796 8,500,777 3,108,701 4,347,690 14,684,355 48,085,676

Leasehold Leasehold fittings Computer Motor Work in

land & building improvement & equipment equipment vehicles progress Total

N'000 N'000 N'000 N'000 N'000 N'000 N'000

Cost

At start of the period 11,680,814 5,759,124 10,194,330 5,508,528 6,015,472 9,814,801 48,973,069

Additions 3,364,199 2,168,005 5,282,213 3,048,704 3,315,569 4,869,554 22,048,244

Reclassifications 96,788 (68,415) (26,514) (1,859) – – –

Disposals (45,456) (10,788) (191,926) (27,306) (456,594) – (732,070)

At end of the period 15,096,345 7,847,926 15,258,103 8,528,067 8,874,447 14,684,355 70,289,243

Accumulated depreciation

At start of the period 402,406 3,226,409 4,221,791 3,430,805 3,147,728 – 14,429,139

Charge for the period 327,679 1,556,206 2,721,384 2,015,554 1,775,191 – 8,396,014

Reclassifications 28,804 (28,700) (411) 307 – – –

Disposals (1,901) (10,785) (185,438) (27,300) (396,162) – (621,586)

At end of the period 756,988 4,743,130 6,757,326 5,419,366 4,526,757 – 22,203,567

Net book amount

At 30 June 2007 11,278,408 2,532,715 5,972,539 2,077,723 2,867,744 9,814,801 34,543,930

Group Bank

June 2007 June 2007

N'000 N'000

Demand 396,474,581 390,718,000

Savings 30,547,884 30,230,365

Term 188,702,032 131,843,040

Domiciliary 18,768,027 15,220,686

634,492,524 568,012,091

Customer deposits for letters of credit (Note 7 ) 120,096,813 119,967,325

Interest payable on deposits 1,560,207 1,159,508

Managers' cheques 16,391,243 16,215,422

Unearned income 3,216,501 3,186,680

Cheques in the course of collection 17,375,522 17,375,522

Other payables 28,993,152 12,183,240

187,633,438 170,087,697

Group Bank


N'000 N'000

16 Deposits

629,442,107 671,079,922

48,657,104 48,086,960

371,556,974 308,694,914

136,236,488 133,613,717

1,185,892,673 1,161,475,513

17 Other liabilities

65,892,939 65,353,040

4,298,144 3,605,864

38,310,329 38,030,277

10,732,025 10,677,565

3,255,342 3,255,342

84,753,316 13,540,149

207,242,095 134,462,237



Group Bank

June 2007 June 2007

N'000 N'000

At start of the period 451,724 449,878

Tax effect of translation – -

Charge for the period 785,941 736,140


The provision for deferred income tax is in respect of fixed assets.

Long term borrowing comprise:

Due to FMO(Note (i)) 3,605,591 3,605,591

Due to ADB(Note (ii)) 12,995,975 12,995,975

Due to ChinaExim(Note (iii)) 2,908,003 2,908,003

Due to EIB(Note (iv)) 633,950 633,950

Due to ICICI(Note (v) 633,950 633,950

Due to HSBC(Note (vi)) 1,170,246 1,170,246

Due to PROPARCO(Note (vii)) – –

Due to Standard Chartered Bank(Note (viii)) – –

Due to Commerz Bank(Note (ix)) – –

21,947,715 21,947,715

(I) The amount due to Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. (FMO) of

N2,125,360,187 ($ 18,062,500) comprises the outstanding balance of two facilities in the sums of $5,000,000 and

$25,000,000 granted by FMO in December 2005. The respective maturity periods of the facilities are 3 years 4

months and 2 years 3 months respectively. Both facilities are priced at 2.65% per annum above LIBOR.

(Ii) The amount due to African Development Bank (ADB) of N 13,874,900,417 ($ 117,916,667) represents the

outstanding balance of two tranches of dollar facilities in the sums of $70,000,000 and $100,000,000 granted by

ADB in May 2005 and May 2007 respectively. Interest is payable half-yearly at the rate of LIBOR + 2.3 % per annum and

LIBOR + 2.2% per annum respectively.

(iii) The amount of N 1,686,725,901 ($14,334,740) represents the ourstanding balance of a five year dollar facility

granted by China Exim Bank. Interest is payable at 5.29% per annum. The facility will mature in 2 years and four

months' time.

(iv) The amount of N 1,336,527,956 ($11,358,562) represents the dollar facility granted by European Investment Bank

(EIB). Interest is payable at LIBOR plus 2.9% per annum. The facility will mature in four years' time.

(v) The amount of N 3,530,010,000 ($30,000,000) represents outstanding balance of four tranches of dollar facilities

granted by ICICI Bank in the sums of $5,000,000, $5,000,000, $5,000,000 and $15,000,000 respectively. The

portfolio of these facilities attract interest at varying rates between LIBOR + 1.9% and LIBOR + 2.65%. This facility will

mature within the next year.

Group Bank


N'000 N'000

18 Deferred income tax liability

1,237,665 1,186,018

(1,363) –

723,575 715,649

1,959,877 1,901,667

19 Borrowings

2,125,360 2,125,360

13,874,900 13,874,900

1,686,726 1,686,726

1,336,528 1,336,528

3,530,010 3,530,010

2,602,763 2,602,763

2,941,675 2,941,675

2,941,675 2,941,675

3,530,010 3,530,010

34,569,647 34,569,647


(vi) The amount of N 2,602,762,861 ($22,119,735) represents the outstanding balance of the dollar facility granted by

HSBC in June 2007 for a period of five years. Interest is payable at the rate of LIBOR plus 0.6 % per annum. The facility

will mature in 3 years and 9 months' time.

(vii) The amount of N 2,941,675,000 ($ 25,000,000) represents the dollar facility granted by Promotion et Participation

pour la Coopération économique (PROPARCO). Interest is payable at LIBOR plus 2.50% per annum. The facility will

mature in four years and one month's time.

(viii)The amount of N 2,941,675,000 ($ 25,000,000) represents the dollar facility granted by Standard Chartered Bank.

Interest is payable at LIBOR plus 2.75% per annum. The facility will mature in October 2008.

(ix) The amount of N 3,530,010,000 ($30,000,000) represents the outstanding balance of the dollar facility granted by

Commerz Bank in June 2007 for a period of 1 year. Interest is payable at the rate of LIBOR plus 1.95 % per annum. The

facility will mature in February 2009.

Group Bank

2007 2007

N'000 N'000

Authorised

20,000,000,000 ordinary shares of 50k each

(2007: 10,000,000,000) 5,000,000 5,000,000

Issued and fully paid

16,744,796,686 ordinary shares of 50k each

(2007: 9,265,524,300) 4,632,762 4,632,762

Movements during the period:


Capitalised during the period - -

Issue of new shares 46,018 46,018


At an Extra-ordinary General Meeting held on 6th February 2008, the shareholders approved an increase in the

authorised share capital of the bank from N7,500,000,000 to N10,000,000,000. During the period, the bank issued

additional 7,479,272,386 ordinary shares and realised N197,174,076,368. The new shares rank pari passu with the

existing shares of the bank.

Group Bank

2008 2008

20 Share capital N'000 N'000

10,000,000 10,000,000

8,372,398 8,372,398

4,632,762 4,632,762

1,158,191 1,158,191

2,581,445 2,581,445

8,372,398 8,372,398




21. Share premium and reserves 30 September

2008

a. Group Total

N'000

108,156,549

194,592,631

(8,782,727)

(9,265,524)

–

51,505,911

336,206,840

30 September

Group 2008

Total

N'000

1,717,341

–

–

(1,158,191)

(1,214,196)

(882)

102,644

(553,284)

September

2008

b. Bank Total

N'000

108,200,561

194,592,630

(8,782,727)

1,158,191

(9,265,524)

–

46,524,991

330,111,740

30 June

Statutory SMEEIs Share General 2007

reserve reserve Premium reserve Total

N'000 N'000 N'000 N'000 N'000

At start of the period 9,899,152 3,729,204 69,237,062 25,291,131 95,876,192

Issue of new shares – – 194,592,631 – 1,509,381

Share issue expenses – – (8,782,727) – (31,886)

Dividend Paid – – – (9,265,524) (6,600,000)

Dividend proposed – – – – 9,265,524

From profit & loss account 6,978,749 – – 44,527,162 8,137,338

At end of the period 16,877,901 3,729,204 255,046,965 60,552,769 108,156,549

30 June

Bonus Conversion Contingency 2007

reserve reserve reserve Total

N'000 N'000 N'000 N'000

At start of the period 1,158,191 399,620 159,530 179,575

Issue of new shares – – – –

Share issue expenses – – – –

Capitalised during the period (1,158,191) – – –

Exchange difference on consolidation – (1,214,196) – 263,622

Adjustment for Minority interest's

share in prior year's reserves – – (882) –

From Profit & Loss account – – 102,644 1,274,144

At end of the period – (814,576) 261,292 1,717,341

30 June

Bonus Issue Statutory SMEEIs Share General 2007

reserve reserve reserve Premium reserve Total

N'000 N'000 N'000 N'000 N'000 N'000

At start of the period 1,158,191 9,899,152 3,729,204 69,237,062 24,176,952 95,813,921

Issue of new shares – – – 194,592,630 – 1,509,381

Share issue expenses – – – (8,782,727) – (31,886)

Capitalised during

the period (1,158,191) – – – – –

Dividend paid – – – – (9,265,524) (6,600,000)

Dividend proposed – – – – – 9,265,524

From Profit & Loss

Account – 6,978,749 – – 39,546,242 8,243,621

At end of the period – 16,877,901 3,729,204 255,046,965 54,457,670 108,200,561




Group Bank

June 2007 June 2007

N'000 N'000

At start of the period 19,150 –

Adjustment to reflect changes in opening

balance of minority interest – –

Nominal value of equity investment in

subsidiary-Ghana (2007: Zenith General

Insurance Company Limited) 288,226 –

Reserves acquired during the period – –

Minority Interest's share of Profit 102,799 –

Minority interest's share of revaluation reserve 17,266 –

Minority interest's portion of Share Premium 1,441,125 –

At end of the period 1,868,566 –

The analysis of percentage holding in respect

of minority interest in the group is as follows:

0.08% Shareholding in Zenith Securities Ltd 1,595 –

1.00% Shareholding in Zenith Pensions

Custodian Company Limited 20,981 –

19.88% Shareholding in Zenith General

Insurance Company Limited 1,845,990 –

19.88% Shareholding in Zenith Medicare Limited – –

18.39% Shareholding in Zenith Life Assurance

Company Limited – –

0.01% Shareholding in Zenith Capital Limited – –

0.02% Shareholding in Zenith Registrars Limited – –

0.05% Shareholding in Zenith Trust Company Limited – –

10.00% Shareholding in Zenith Bank (Ghana) Limited – –

1,868,566 –

In accordance with the provisions of the Pensions Act 2004, the bank and its subsidiaries commenced a contributory

pension scheme in January 2005. The contribution by employees and the bank are 2.5% and 12.5% respectively of the

employees' basic salary, housing and transport allowances. The contribution by the group and the bank during the

period were N 2,011,633,414 and N1,913,522,024 respectively (2007: N 1,123,113,000 and N1,103,468,000 ).

Group Bank


N'000 N'000

22 Minority Interest

1,868,566 –

(207,704) –

161,160 –

999 –

383,684 –

62,693 –

– –

2,269,398 –

1,091 –

25,379 –

1,584,814 –

30,694 –

401,054 –

206 –

387 –

48 –

225,725 –

2,269,398 –

23 Pension contribution




24 Related party transactions

(i) The bank granted various credit facilities to other companies which have common directors with the bank and those

that are members of the Group. The rates and terms agreed are comparable to other facilities being held in the bank's

portfolio. Details of these are described below:

ii Significant deposit balances held by the bank on behalf of related parties are as follows:

Entity N'million Relationship to the bank

Cyberspace Limited 333 Associated Company

Zenith Medicare Limited 297 Subsidiary

Zenith Capital Limited 44 Subsidiary

Zenith General Insurance Company Limited 2,445 Subsidiary

Zenith Life Assurance Company Limited 238 Subsidiary

Zenith Pensions Custodian Limited 2,707 Subsidiary

Zenith Registrars Limited 4,080 Subsidiary

Zenith Securities Limited 39,441 Subsidiary

Zenith Trust Company Limited 36 Subsidiary

Visafone Communications Limited 7,881 Common Directorship




Group Bank

June 2007 June 2007

Number Number

The average number of persons employed

during the period by category:

Executive directors 9 6

Management 304 280

Non-management 5,122 4,680

5,435 4,966

Compensation for the above persons

(including executive directors): N'000 N'000

Salaries and wages 13,527,429 12,630,173

Provision for retirement benefit (Note 23) 1,123,113 1,103,468

14,650,542 13,733,641

The number of employees of the bank, other than directors, who earned salaries and emoluments (excluding pension

and reimbursable expenses) are in the following ranges:

Number Number

Below N1,500,000 233 –

N1,500,000 – N2,000,000 1,825 1,731

N2,000,001 – N2,500,000 1,010 1,000

N2,500,001 – N3,000,000 35 –

N3,000,001 – N3,500,000 558 538

N3,500,001 – N3,800,000 551 542

N3,800,001 – N4,000,000 3 –

N4,000,001 – N4,500,000 10 –

N4,500,001 – N5,000,000 183 174

N5,000,000 and above 1,018 975

5,426 4,960

June 2007 June 2007

N'000 N'000

The remuneration paid to the directors of the bank was:

Fees and sitting allowances 128,840 72,715

Executive compensation 185,620 108,715

314,460 181,430

Fees and other emoluments disclosed above

Include amounts paid to:

The chairman 7,560 7,560

The highest paid director 82,112 35,000

The number of directors who received fees and other emoluments (excluding pension contributions

and reimbursable expenses) in the following ranges was:

Number Number

N5,500,001 and above 14 13

Group Bank


25 Employees Number Number

19 6

484 453

7,125 6,691

7,628 7,150

N'000 N'000

31,912,255 29,649,198

2,030,075 1,913,522

33,942,330 31,562,720

Number Number

74 –

185 –

16 2,623

2,639 –

52 1,462

6 –

1,598 1,572

22 –

4 –

3,013 1,487

7,609 7,144


26 Directors' emoluments N'000 N'000

202,279 109,073

291,423 163,073

493,702 272,145

18,580 8,920

52,500 52,500







27 Contingent liabilities and commitments Group Bank


N'000 N'000

7,706,102 7,706,102

Group Bank


N'000 N'000

303,589,594 288,026,282

142,193,722 137,845,879

278,514,423 278,514,423

724,297,739 704,386,584

Group Bank

June 2007 June 2007

N'000 N'000

(a) Capital commitments

Authorised and contracted 1,269,230 1,269,230

(b) Confirmed credits and other obligations on behalf of customers

In the normal course of business the bank is a party to financial instruments with off-balance sheet risk. These

instruments are issued to meet the credit and other financial requirements of customers. The contractual amounts of

the off-balance sheet financial instruments are:

Group Bank

June 2007 June 2007

N'000 N'000

Contingent Liability - Bonds & Guarantees 136,869,226 135,641,000

Contingent Liability- Usance 62,407,817 59,942,757

Contingent Liability - Pension Funds(b (i)) 98,861,026 98,861,026

298,138,069 294,444,783

(b (i))

The amount of N 278,514,423,348 (2007: N 98,861 025,754) represents the full amount of the bank's guarantee for

the assets held by its subsidiary, Zenith Pensions Custodian Limited under the latter's custodial business as required

by the National Pensions Commission.

(c) Litigation

The Bank is a party to legal actions arising out of its normal business operations for claims against it amounting to N

538, 228,789 as at 30 September 2008 (2007: N983,430,800).

The Directors believe that, based on currently available information and advice of counsel, none of the outcomes that

result from such proceedings will have a material adverse effect on the financial position of the Group, either

individually or in the aggregate. Consequently, no provision has been made in these financial statements.

Group Bank

June 2007 June 2007

N'000 N'000

Reconciliation of profit before tax to cash generated from operations:

Profit before tax 25,676,331 23,288,828

Provision for loan losses and interest in suspense 1,800,632 1,751,674

Depreciation 4,793,569 4,481,864

Exchange difference arising on the retranslation

of retained earnings (subsidiaries) (11,575) -


of opening net assets (subsidiaries) 271,724 -


of opening accumulated depreciation - -

Realised loss/(gain) on disposal of subsidiary - -

Profit on disposal of fixed assets (4,008) (4,144)

32,526,673 29,518,222

Increase in loans and advances (89,615,434) (20,289,739)

(Increase)/decrease in advances under finance leases (740,202) (740,202)

Increase in other facilities (2,486,260) (2,486,260)

Increase/ (Decrease) in other assets (9,608,114) (5,994,972)

Increase in deposits 241,183,948 175,148,392

Increase in other liabilities 81,918,713 71,904,022

Cash generated from operations 253,179,324 247,059,463

Group Bank


N'000 N'000

28 Cash generated from operations

56,118,708 48,939,945

7,798,706 7,435,659

9,026,242 8,396,014

95,238 -

(1,061,951) -

(17,204) -

(7,415) 20,248

(45,432) (45,432)

71,906,892 64,746,434

(165,360,779) (202,793,228)

(2,290,403) (1,503,269)

(1,110,305) (1,110,305)

(16,137,003) (14,828,306)

551,400,149 593,463,422

19,608,657 (35,625,460)

458,017,208 402,349,288







29 Liquidity risk

Maturities of assets and liabilities

a Group

0 - 30 days 31 - 90 days 91 - 180 days 181 - 365 days Over 1 year Total

N'000 N'000 N'000 N'000 N'000 N'000

Assets

Cash and short-term funds 429,564,372 163,363,239 110,772,785 64,704,731 407,897,539 1,176,302,666

Loans and advances 146,959,704 2,991 96,436 398,779 298,379,479 445,837,390

Other Facilities - - - - 5,801,093 5,801,093

Advances under finance lease - - - - 4,677,569 4,677,569

Other assets 151,423 136,284 - - 40,038,631 40,326,339

Deferred tax asset - - - - 160,434 160,434

Investment - - - - 63,783,624 63,783,624

Fixed assets 50,942,583 50,942,583

576,675,500 163,502,515 110,869,221 65,103,511 871,680,952 1,787,831,698

Liabilities

Deposits 1,064,843,603 53,988,529 8,534,996 6,442,559 52,082,986 1,185,892,673


Other liabilities 3,925,525 - 87,764,482 112,823,208 2,728,881 207,242,095

Current income tax - - - - 5,690,073 5,690,073

Deferred income tax liability - - - - 1,959,877 1,959,877

Borrowings - - - - 34,569,647 34,569,647

1,068,769,128 53,988,529 96,299,478 119,265,767 102,891,154 1,441,214,055

Net liquidity gap (492,093,629) 109,513,986 14,569,743 (54,162,256) 768,789,799 346,617,643

As at 30 June 2007

Total assets 585,248,733 158,078,841 59,584,297 10,886,535 159,144,117 972,942,523

Total liabilities 580,279,771 69,110,935 19,435,723 1,861,281 185,800,158 856,487,868

Net liquidity gap 4,968,962 88,967,906 40,148,574 9,025,254 (26,656,041) 116,454,655




b Maturities of assets and liabilities

Bank

0 - 30 days 31 - 90 days 91 - 180 days 181 - 365 days Over 1 year Total

N'000 N'000 N'000 N'000 N'000 N'000

Assets

Cash and short-term funds 388,064,793 147,580,958 100,071,190 58,453,703 414,656,857 1,108,827,501

Loans and advances 248,496,489 1,121,114 6,365,620 12,944,562 144,803,706 413,731,491


Advances under finance lease - - - - 3,890,435 3,890,435

Other assets 67,861 - - - 29,600,032 29,667,893

Investment - - - - 70,297,916 70,297,916

Fixed assets - - - - 48,085,676 48,085,676

636,629,143 148,702,072 106,436,810 71,398,265 717,135,715 1,680,302,005

Liabilities

Deposits 1,096,017,820 50,683,452 8,012,499 6,048,158 713,584 1,161,475,513

Othe Facilities - - - - 5,859,690 5,859,690

Other liabilities 3,925,525 - 78,010,787 49,173,738 3,352,187 134,462,237

Current income tax - - - - 3,549,113 3,549,113

Deferred taxation - - - - 1,901,667 1,901,667

Borrowings - - - - 34,569,647 34,569,647

1,099,943,345 50,683,452 86,023,286 55,221,896 49,945,888 1,341,817,867

Net liquidity gap (463,314,202) 98,018,620 20,413,524 16,176,369 667,189,827 338,484,138

As at 30 June 2007

Total assets 569,148,756 104,127,976 27,864,306 10,715,007 172,084,881 883,940,926

Total liabilities 558,442,947 17,586,326 16,889,677 1,861,281 176,327,372 771,107,603

Net liquidity gap 10,705,809 86,541,650 10,974,629 8,853,726 (4,242,491) 112,833,323

The table above analyses assets and liabilities of the bank into relevant maturity groupings based on the remaining

period at balance sheet date to the contractual maturity date. The matching and controlled mismatching of the

maturities and interest rates of assets and liabilities is fundamental to the management of the Group and the bank. It is

unusual for banks to be completely matched since business transacted is often of uncertain terms and of different types.

The maturity of assets and liabilities and the ability to replace, at an acceptable cost, interest-bearing liabilities as they

mature, are important factors in assessing the liquidity of the Group and the bank and its exposure to changes in interest

rates.



30 Earnings Per Share

Group Bank


51,608,555 46,524,991

13,486,990 13,486,990

16,744,797 16,744,797

383 k 345 k

308 k 278 k

31 Segment Reporting

Corporate and Retail Banking

Investment Management and Securities Trading

General, Health and Life Insurance

Others

Group Bank

June 2007 June 2007

Profit Attributable to shareholders of the bank (N'000) 18,677,006 17,509,145

Weighted Average number of ordinary shares in issue 9,242,326 9,242,326

Number of shares in issue at end of the period 16,744,797 16,744,797

Basic earnings per share (Kobo) 202 k 189 k

Adjusted earnings per share (Kobo) 112 k 105 k

Earning per share (basic) is calculated by using the weighted average number of shares in issue during the period as

the denominator.

Earnings per share (adjusted) is calculated by using the number of shares in issue during the period as the

denominator

(a) By Business Segment

The Zenith Group's business activities are conducted principally through four segments:

This segment provides a broad range of banking services to a diverse group of corporations, financial institutions,

investment funds, governments and individuals.

Provision of investment advisory, financial planning services and investment product offerings (primarily through

separately managed accounts such as mutual funds and private investment funds) to a diverse group of institutions

and individuals. It also includes brokerage services, financing services and securities lending services to institutional

clients, including mutual funds, pension funds and to high-net-worth individuals.

The Group’s general insurance operations write substantially all lines of insurance other than title insurance while its

life and health insurance operations offer a broad line of individual and group life, annuity and accident and health

policies.

This segment provides share registration, pension custodial and funds trusteeship services. None of these individual

activities or services constitutes a separate reportable segment.

Segment assets and liabilities comprise operating assets and liabilties, being the majority of the balance sheet, but

exclude items such as taxation and borrowings.


The following summarises the Group's operations by major operating segments for the period under review.

Investment General,

Corporate Management Health and

and Retail and Securities Life

Banking Trading Insurance Others Eliminations Consolidated

N'000 N'000 N'000 N'000 N'000 N'000

Revenue:

Derived from external customers 193,070,640 8,848,691 3,255,281 3,119,169 – 208,293,781

Derived from other business

Segments 7,196,642 528,673 365,412 407,338 (8,498,065) –

Total revenue 200,267,282 9,377,364 3,620,693 3,526,507 (8,498,065) 208,293,781

Expense:

Operating expenses (including

Interest expenses and loan loss

Expenses) 149,822,413 7,812,618 1,888,962 1,149,145 (8,498,065) 152,175,073

Total cost 149,822,413 7,812,618 1,888,962 1,149,145 (8,498,065) 152,175,073

Profit before tax 50,444,869 1,564,746 1,731,731 2,377,362 – 56,118,708

Tax (2,566,480) (392,999) (390,339) (776,651) – (4,126,469)

Profit after tax 47,878,389 1,171,747 1,341,392 1,600,711 – 51,992,239

Other segment items

Capital expenditure 22,603,861 417,426 162,663 79,153 – 23,263,103

Depreciation expense 8,820,674 48,783 58,919 97,866 – 9,026,242

Identifiable assets 1,813,370,017 65,328,859 13,712,544 12,627,743 (117,207,465) 1,787,831,698

Identifiable liabilities 1,465,328,950 62,063,388 3,397,330 8,358,255 (97,933,868) 1,441,214,055

Capital expenditure comprises additions to fixed assets including additions resulting from acquisitions through business

combinations.

All transactions between business segments are conducted on an arm’s length basis. Internal charges and transfer pricing

adjustments are reflected in the performance of each business segment.






(b) By Geographical segment:

Rest

Nigeria of Africa Europe Eliminations Consolidated

N'000 N'000 N'000 N'000 N'000

Revenue:

Derived from external customers 198,101,532 6,194,393 3,997,856 - 208,293,781

Derived from other business segments 8,498,065 - - (8,498,065) -

Total revenue 206,599,597 6,194,393 3,997,856 (8,498,065) 208,293,781

Operating expenses (including Interest

expenses and loan loss expenses) 151,978,397 4,696,446 3,998,295 (8,498,065) 152,175,073

Total cost 151,978,397 4,696,446 3,998,295 (8,498,065) 152,175,073

Profit before tax 54,621,200 1,497,947 (439) – 56,118,708

Tax (3,974,943) (77,947) (73,579) – (4,126,469)

Profit after tax 50,646,257 1,420,000 (74,018) – 51,992,239

Other segment items

Capital expenditure 22,707,488 411,827 143,788 – 23,263,103

Depreciation expense 8,601,583 339,242 85,417 – 9,026,242

Identifiable assets 1,771,971,149 36,151,618 96,916,396 (117,207,465) 1,787,831,698

Identifiable liabilities 1,415,636,841 33,894,372 89,616,710 (97,933,868) 1,441,214,055

Details of banking legislation which the bank contravened are as follows:

Nature of Contravention No of Penalties

times (N'000)

1 Non-implementation of previous examination recommendation 1 2,000

2 Treatment of Open Buy Back (OBB) transactions as part of Treasury Bills portfolio 1 2,000

3 Reporting of AFREXIM facilities as contingent liability 1 2,000

Where necessary, comparative figures have been adjusted to conform with changes in presentation in the current

period.

Expense:

32 Contraventions

33 Comparatives


STATEMENT OF VALUE ADDED (Group)


% %

Gross income

Interest paid

Administrative overheads

Value added 100 100

Distribution

Employees

Salaries and benefits 30 33

Providers of funds

Dividend 8 15

Government

Income tax 4 16

The future

Asset replacement (depreciation) 7 11

Profit for the period (including statutory,

small scale industry, contingency reserves

And minority interest) 45 21

Provision for losses 6 4

100 100

Group Group

2008 2007

N’000 N’000

208,293,781 94,880,113

(53,598,072) (19,038,744)

154,695,709 75,841,369

(39,961,885) (31,554,168)

114,733,824 44,287,201

33,942,330 14,650,542

9,265,524 6,600,000

4,180,657 6,896,526

9,026,242 4,793,569

51,992,239 9,514,281

6,326,832 1,832,283

114,733,824 44,287,201



STATEMENT OF VALUE ADDED (Bank)

% %

Gross income

Interest paid

Administrative overheads

Value added 100 100

Distribution

Employees

Salaries and benefits 30 34

Providers of funds

Dividend 9 16

Government

Income tax 2 14

The future

Asset replacement (depreciation) 8 11

Expansion (retained profit) 45 21

Provision for losses 6 4

100 100

These statements represent the distribution of the wealth created through the use of the group's assets through its own

and its employees' efforts.

Bank Bank

2008 2007

N'000 N'000

190,075,034 89,193,780

(49,962,969) (18,733,167)

140,112,065 70,460,613

(35,870,458) (29,838,479)

104,241,607 40,622,134

31,562,720 13,733,642

9,265,524 6,600,000

2,414,954 5,779,683

8,396,014 4,481,864

46,524,990 8,303,114

6,077,405 1,723,831

104,241,607 40,622,134


FOUR YEAR FINANCIAL SUMMARY

Group 2007 2006 2005

N'000 N'000 N'000

Cash and short term funds 574,957,394 365,166,368 162,698,923

Loans and advances 288,111,826 200,237,530 121,625,817Other Facilities 4,701,891 2,263,125 –

Advances under finance lease 2,444,566 1,716,364 841,165Other assets 24,177,368 14,569,251 23,161,581Deferred tax asset 120,394 – –

Investment 41,629,665 11,154,504 6,205,718Fixed assets 36,799,420 24,234,041 15,474,123

972,942,524 619,341,183 330,007,327

Deposits 634,492,524 393,308,576 233,038,646

Other facilities 4,749,385 2,263,125 –Other liabilities 187,633,438 105,714,725 52,332,741Current income tax 6,427,141 4,191,372 2,085,832

Deferred income tax liability 1,237,665 451,724 449,878Borrowings 21,947,715 12,750,000 –

856,487,868 518,679,522 287,907,097

Net Assets 116,454,656 100,661,661 42,100,230

Share capital 4,632,762 4,586,744 3,000,000Share premium 69,237,062 67,759,567 18,224,108

Reserves for Small Scale Industries 3,729,204 3,729,204 2,580,324

Other reserves 36,987,062 24,566,996 18,295,599

Shareholders' Funds 114,586,090 100,642,511 42,100,031Minority Interest 1,868,566 19,150 199

116,454,656 100,661,661 42,100,230

Acceptances and guarantees 298,138,069 156,685,122 41,004,756

Gross Earnings 94,880,113 60,002,149 35,312,473

Interest expense (19,038,744) (10,376,926) (5,594,029)

Operating expenses (48,332,755) (32,725,662) (18,555,976)

Loan loss expense (1,832,283) (1,309,736) (1,974,967)

Profit before tax 25,676,331 15,589,825 9,187,501

Income tax (6,896,527) (3,970,598) (2,044,235)

Profit after tax 18,779,804 11,619,227 7,143,266

Minority Interest (102,799) 1,049 (120)

Profit attributable to

Group Shareholders 18,677,005 11,620,276 7,143,146

Dividend proposed (9,265,524) (6,600,000) (4,200,000)

Dividend 6,600,000 4,200,000 2,167,977

Transfer to reserves 16,011,481 9,220,276 5,111,123

Earnings per share (basic 202 k 193 k 135k

Earnings per share (adjusted) 202 k 125 k 135 k

2008

N'000

ASSETS EMPLOYED

1,176,302,666

445,837,3905,801,0934,677,569

40,326,339160,434

63,783,624

50,942,583

1,787,831,698

FINANCED BY1,185,892,673

5,859,690207,242,095

5,690,0731,959,877

34,569,647

1,441,214,055

346,617,643

8,372,398 255,046,965

3,729,204

77,199,678

344,348,2452,269,398

346,617,643

724,297,739

PROFIT AND LOSS ACCOUNT

208,293,781

(53,598,072)

(92,250,169)

(6,326,832)

56,118,708

(4,126,469)

51,992,239

(383,684)

51,608,555

–

9,265,524

60,874,079

383 k

308 k


FIVE YEAR FINANCIAL SUMMARY (Bank)


2007 2006 2005 2004

N'000 N'000 N'000 N'000

Cash and short-term funds 563,581,290 360,291,162 180,407,249 121,891,453

Loans and advances 218,305,419 199,707,860 122,494,396 53,391,209

Other facilities 4,701,891 2,263,125 3,168,585 –

Advances under finance lease 2,444,566 1,716,364 841,165 847,861

Other assets 14,839,588 9,105,717 4,755,887 3,294,490

Investments 45,524,242 14,581,735 6,139,063 4,427,083

Fixed assets 34,543,930 23,102,337 15,078,751 9,469,393

883,940,926 610,768,300 332,885,096 193,321,489

Share capital 4,632,762 4,586,744 3,000,000 1,548,555

Share premium 69,237,062 67,759,567 18,224,108 -

Reserves for Small Scale Industries 3,729,204 3,729,204 2,580,324 1,864,731

Other reserves 35,234,295 24,325,150 13,985,230 12,261,082

Deposits 568,012,091 392,863,699 233,413,428 131,095,341

Other liabilities 170,087,697 98,183,675 56,013,477 44,920,930

Other Facilities 4,749,385 2,263,125 3,168,585 –

Taxation 5,124,697 3,857,258 2,050,066 1,363,979

Deferred taxation 1,186,018 449,878 449,878 266,871

Borrowings 21,947,715 12,750,000 – –

883,940,926 610,768,300 332,885,096 193,321,489

Acceptances and guarantees 294,444,783 149,203,099 41,004,756 21,905,277

Gross Earnings 89,193,780 58,221,823 34,913,462 23,931,255

Interest expense (18,733,167) (10,462,632) (5,620,169) (3,331,910)

Operating expenses (45,388,460) (31,298,175) (18,153,540) (13,797,311)

Loan loss expense (1,783,325) (1,306,925) (1,974,966) (397,149)

Profit before tax 23,288,828 15,154,091 9,164,787 6,404,885

Income tax (5,779,683) (3,665,291) (2,008,861) (1,214,117)

Profit after tax 17,509,145 11,488,800 7,155,926 5,190,768

Dividend proposed (9,265,524) (6,600,000) (4,200,000) (2,167,977)

Dividend 6,600,000 4,200,000 2,167,977 1,083,989

Transfer to reserves 14,843,621 9,088,800 5,123,903 4,106,780

Earnings per share (basic) 189 k 191 k 136 k 168 k

Earnings per share (adjusted) 105 k 124 k 119 k 86 k

2008

N'000

ASSETS EMPLOYED

1,108,827,501

413,731,491

5,801,093

3,890,435

29,667,893

70,297,916

48,085,676

1,680,302,005

FINANCED BY

8,372,398

255,046,965

3,729,204

71,335,571

1,161,475,513

134,462,237

5,859,690

3,549,113

1,901,667

34,569,647

1,680,302,005

704,386,584

PROFIT AND LOSS ACCOUNT

190,075,034

(49,962,969)

(85,094,715)

(6,077,405)

48,939,945

(2,414,954)

46,524,991

-

9,265,524

55,790,515

345 k

278 k

NOTES


I/We*_____________________________________________________

of________________________________________________________

being a member/members of Zenith Bank Plc hereby appoint **

_________________________________________________________

_________________________________________________________

failing him, Jim Ovia_________________________________________________________

as my/our proxy to act and vote for me/us on my/our behalf at The Annual General Meeting of the bank on the 4th day of December, 2008 or at any adjournment thereof.

Dated this___________day of_________________________ 2008

Shareholder's Signature(s)______________________________

This Proxy Form should not be completed and sent to the bank's registered address if the member will be attending the Meeting.

(Name of shareholder in block letters)

ZENITH BANK PLC

PROXY CARDANNUAL GENERAL MEETING TO BE HELD AT 9.00 A.M.

ON 4TH DAY OF DECEMBER, 2008 ATTHE BANQUET HALL, YAR' ADUA MEMORIAL CENTRE, ABUJA.

ADMISSION FORM

Annual General Meeting to be held at 9:00 a.m. on Thursday,

4th December, 2008 at THE SHEHU MUSA YAR’ADUA CENTER,

ABUJA.

A member (Shareholder) who is unable to attend an Annual

General Meeting is allowed by law to vote on a poll by proxy.

The above form has been prepared to enable you to exercise

your right to vote, in case you cannot personally attend the

Meeting.

Following the normal practice, the names of two Directors of

the Company have been entered on the form to ensure that

someone will be at the Meeting to act as your proxy, but if you

wish, you may insert in the blank space on the form (marked**)

the name of any person whether a Member of the Company or

not, who will attend the Meeting and vote on your behalf

instead of one of the Directors.

BEFORE POSTING THE ABOVE FORM, PLEASE TEAR OFF THIS PART AND RETAIN FOR ADMISSION TO THE MEETING

NUMBER OF SHARES

Please sign the above proxy form and post it, so as to reach the

address overleaf not later than 48 hours before the time for holding

the meeting.

If executed by a corporation, the proxy form should be sealed with

the Corporation’s Common Seal.

IMPORTANT

The name of the Shareholder must be written in BLOCK CAPITALS on

the proxy form where marked. This admission form must be

produced by the Shareholder or his proxy, who need not be a

member of the Company, in order to obtain entrance to the Annual

General Meeting.

Signature of person attending_____________________

The manner in which the Proxy is to vote should be indicated by inserting “X” in the appropriate space.

NUMBER OF SHARES

RESOLUTIONS FOR AGAINST

1. To receive the Accountsand the Reports thereon.

2. To declare a Dividend

3.

4. To fix the remuneration of the Directors

5. To authorise the Directors to fixthe remuneration of the Auditors

6. To elect members of the audit Committee

Please indicate with an “X” in the appropriate square how you wish your votes to be cast on resolutions set out above. Unless otherwise instructed the proxy will vote or abstain from voting at his discretion.

To re-elect as Directors

REGISTRARZENITH REGISTRARS LIMITED,89A, AJOSE ADEOGUN STREET,VICTORIA ISLAND,LAGOS.

7.14

11.62

18.78

51.99

-

10.00

20.00

30.00

40.00

50.00

60.00

2005 2006 2007 2008

2008

9.19

15.59

25.68

56.12

-

10.00

20.00

30.00

40.00

50.00

60.00

2005 2006 2007

42.10

100.64 114.59

2005 2006 2007 2008

344.35


35.31

60.00

94.88

208.29

-

50.00

100.00

150.00

200.00

250.00

2005 2006 2007 2008

Gross Earnings (Group) (N'b) Profit Before Tax (Group) (N'b)


233.04

393.31

1,185.89

-

200.00

400.00

600.00

800.00

1,000.00

1,200.00

2005 2006 2008



371.01

776.03

1,271.08

-

500.00

1,000.00

1,500.00

2,000.00

2,500.00

3,000.00

2005 2006 2007 2008



2004

131.10

1,161.48


2004 2005 2006 2007 2008

15.67 37.79

100.40 112.83

338.48


2004 2005 2006 2007 2008

215.23

759.97

1,178.39

2,384.69

373.89


23.9334.91

58.22

89.19

190.08

-

50.00

100.00

150.00

200.00

2004 2005 2006 2007 2008


6.409.16

15.15

23.29

48.94

-

10.00

20.00

30.00

40.00

50.00

2004 2005 2006 2007 2008


5.197.16

11.49

17.51

46.52

-

10.00

20.00

30.00

40.00

50.00

2004 2005 2006 2007 2008


44 group annual report & accounts, 2008group annual report & accounts, 2008 55group annual report & accounts, 2008group annual report & accounts, 2008

634.49

2007

2,512.13

2005

233.41

2006

392.86

2007

568.01

2008

-

70.00

140.00

210.00

280.00

350.00

-

300.00

600.00

900.00

1,200.00

70.00

140.00

210.00

280.00

350.00

-

500.00

1,000.00

1,500.00

2,000.00

2,500.00

-

GROUP FINANCIAL HIGHLIGHT BANK FINANCIAL HIGHLIGHT


Jim OviaGroup Managing Director / Chief Executive


Group Annual Report 2008 Group Annual Report 2008

C h a i r m a n ’ s S t a t e m e n t C h a i r m a n ’ s S t a t e m e n t c o n t ’ d

Sir S.P.O. Fortune EbieDirector

Godwin EmefieleDeputy Managing Director

Prof. L.F.O. Obika Director

Chief E. M. EgwuenuDirector

Jim OviaGroup Managing Director/CEO


-

300.00

600.00

900.00

1,200.00

2004 2005 2006 2007 2008

131.10

233.41

392.86

568.01

1,161.48


Apollos IkpobeExecutive Director

Babatunde AdejuwonDirector

Peter AmangboExecutive Director

Elias Igbin-Akenzua Executive Director

Udom Emmanuel Executive Director

Andy OjeiExecutive Director

Alhaji Baba TelaDirector

Sir Steven OmojaforDirector

Peter Amangbo

Elias Igbin-Akenzua

Apollos Ikpobe

Udom Emmanuel Andy Ojei

Adaora Remy Umeoji

Jim Ovia

Godwin Emefiele

group annual report & accounts, 2008group annual report & accounts, 20082222 group annual report & accounts, 2008group annual report & accounts, 2008 2323

Michael O. Otu, Esq.Company Secretary

233.04

393.31

634.49

1,185.89

-

200.00

400.00

600.00

800.00

1,000.00

1,200.00

2005 2006 2007 2008

24 Related party transactions

Group Bank


25 Employees Number Number

19 6

484 453

7,125 6,691

7,628 7,150

N'000 N'000

31,912,255 29,649,198

2,030,075 1,913,522

33,942,330 31,562,720

The bank granted various credit facilities to other companies which have common directors with the bank and those

that are members of the Group. The rates and terms agreed are comparable to other facilities being held in the bank's

portfolio. Details of these are described in the following paragraphs:

i Senforce Vegetable Oil Limited, which has a common shareholder with the bank, has an outstanding overdraft facility

with a balance of N33.02 million at year end (2007: N67.5 million). The facility expired on 31 December 1995 and has

been classified as lost and the collateral for the facility has been perfected

ii Loans and overdraft facilities were made available the following entities at normal commercial terms:

Entity N' million Relationship to the bank

Zenith Registrars Limited 221 Subsidiary


Zenith Securities Limited 250 Subsidiary



Accion Microfinance Limited 43 Investee Company (under SMIEIS)

Cyberspace Executive Services 210 Associated Company

Tadop Properties Limited 10,000 Common Directorship

The total amount outstanding on all the facilities are deemed to be performing.

iii Significant deposit balances held by the bank on behalf of related parties are as follows:

Entity N'million Relationship to the bank


Zenith Medicare Limited 297 Subsidiary

Zenith Capital Limited 44 Subsidiary

Zenith General Insurance Company Limited 2,445 Subsidiary


Zenith Pensions Custodian Limited 2,707 Subsidiary

Zenith Registrars Limited 4,080 Subsidiary

Zenith Securities Limited 39,441 Subsidiary

Zenith Trust Company Limited 36 Subsidiary


iv The bank also extended a finance lease facility to Cyberspace Executive Services Limited. At the year end, the finance

lease outstanding in the name of the company amounted to N 5,830 million (2007: NIL).

Group Bank

June 2007 June 2007

Number Number

The average number of persons employed

during the period by category:

Executive directors 9 6

Management 304 280

Non-management 5,122 4,680

5,435 4,966

Compensation for the above persons

(including executive directors): N'000 N'000

Salaries and wages 13,527,429 12,630,173

Provision for retirement benefit (Note 23) 1,123,113 1,103,468

14,650,542 13,733,641

MANAGEMENT TEAMMANAGEMENT TEAM

JIM OVIA – GROUP MANAGING DIRECTOR/CHIEF EXECUTIVE

EMEFIELE GODWIN – DEPUTY MANAGING DIRECTOR

AMANGBO PETER – EXECUTIVE DIRECTOR

IKPOBE APOLLOS – EXECUTIVE DIRECTOR

EMMANUEL UDOM – EXECUTIVE DIRECTOR

OJEI ANDREW – EXECUTIVE DIRECTOR

IGBINAKENZUA ELIAS – EXECUTIVE DIRECTOR

UMEOJI, ADAORA – GROUP DIRECTOR

AYENI NONYE – GENERAL MANAGER

EHIMIAGHE OHIMAI – GENERAL MANAGER

OKOYE CHARLES – GENERAL MANAGER

JARIKRE GIDEON – GENERAL MANAGER

OLANIPEKUN TUNJI – GENERAL MANAGER

IBEKWE OBI – GENERAL MANAGER

OSAKWE OSADEBE – GENERAL MANAGER

OLISA DENNIS – GENERAL MANAGER

OLADIPO SOLA – GENERAL MANAGER

YOUGH PAMELA – GENERAL MANAGER

BOLORUNDURO ADEWALE. – GENERAL MANAGER

NWARACHE PATRICK – GENERAL MANAGER

ADENIYI ADEWALE – GENERAL MANAGER

ESENWA JOSEPH – GENERAL MANAGER

FASORANTI TEMITOPE – GENERAL MANAGER

NWAPA, ADOBI – GENERAL MANAGER

ONYEAGWU EBENEZER – GENERAL MANAGER

IKEH-UNEKWE O.A – GENERAL MANAGER

MENIRU EKENE – GENERAL MANAGER

UDENSI ADAEZE – GENERAL MANAGER

SHETTIMA KASHIM – GENERAL MANAGER

ILEGAR I.S – GENERAL MANAGER

DAYILIM ABBAS – GENERAL MANAGER

OMEJE ALPHONSUS – GENERAL MANAGER

MAHE ABUBAKAR – GENERAL MANAGER

EKPEBU TARI – GENERAL MANAGER

ONYEMENAM CHRIS – DEPUTY GENERAL MANAGER

CHUKWUNYEM, FRANCIS – DEPUTY GENERAL MANAGER

EKONYE FRANCIS – DEPUTY GENERAL MANAGER

OKITI, OCHUKO – DEPUTY GENERAL MANAGER

IBOJE, MARVIS – DEPUTY GENERAL MANAGER

AGOREYO AJEWHEFIUWHE – DEPUTY GENERAL MANAGER

OGUNBIYI ADEWUNMI – DEPUTY GENERAL MANAGER

OGUNRANTI ANTHONY – DEPUTY GENERAL MANAGER

ANYIMAH MICHAEL – DEPUTY GENERAL MANAGER

EKHORAGBON GADAFFI – DEPUTY GENERAL MANAGER

OLUGBUYI OLADOYIN – DEPUTY GENERAL MANAGER

LATUNJI OLUBUKOLA – DEPUTY GENERAL MANAGER

ONI-EGBOMA NKEM – DEPUTY GENERAL MANAGER

ABANUM RAPHAEL. – DEPUTY GENERAL MANAGER

OROH HENRY – DEPUTY GENERAL MANAGER

AMENE RITA – DEPUTY GENERAL MANAGER

ETIEBET, IDONGESIT – DEPUTY GENERAL MANAGER

ATSAGBEDE MOGBITSE – DEPUTY GENERAL MANAGER

EZE PETER – DEPUTY GENERAL MANAGER

ANYAEGBUNAM EMEKA – DEPUTY GENERAL MANAGER

NJOKO AUGUSTINE – DEPUTY GENERAL MANAGER

MA'AJI IRO – DEPUTY GENERAL MANAGER

IGHADE LUCKY – DEPUTY GENERAL MANAGER

ISHOLA OLANREWAJU – DEPUTY GENERAL MANAGER

ODOM EZIOKWU – DEPUTY GENERAL MANAGER

AWE LUGARD – DEPUTY GENERAL MANAGER

AMEH OWOICHO – DEPUTY GENERAL MANAGER

AHMED UMAR – DEPUTY GENERAL MANAGER

NTIA GABRIEL – DEPUTY GENERAL MANAGER

ISIAKPONA EMEKA – ASSISTANT GENERAL MANAGER

AKINWOLERE OLATILEWA – ASSISTANT GENERAL MANAGER

UZOEBO ANTHONY – ASSISTANT GENERAL MANAGER

BABALOLA LAWRENCE – ASSISTANT GENERAL MANAGER

NKECHIKA CHIOMA – ASSISTANT GENERAL MANAGER

AMUCHIE STANLEY – ASSISTANT GENERAL MANAGER

EGBON FELIX – ASSISTANT GENERAL MANAGER

EJOOR TIMEYIN – ASSISTANT GENERAL MANAGER

OTU MICHAEL – ASSISTANT GENERAL MANAGER

AJUYAH MAJEMITE – ASSISTANT GENERAL MANAGER

EDEKOBI NNAMDI – ASSISTANT GENERAL MANAGER

DIM-NWANEDO, JOAN I – ASSISTANT GENERAL MANAGER

MOKA, ANTHONY – ASSISTANT GENERAL MANAGER

ACHA NDUKWE – ASSISTANT GENERAL MANAGER

OLIE EDWIN – ASSISTANT GENERAL MANAGER

BASSEY, DAVID – ASSISTANT GENERAL MANAGER

ODUAH STANLEY – ASSISTANT GENERAL MANAGER

OKOH CHUKWUKA – ASSISTANT GENERAL MANAGER

AWE OLADIPO – ASSISTANT GENERAL MANAGER

NWOBODO, IFEYINWA – ASSISTANT GENERAL MANAGER

IWOBHO CHARLES – ASSISTANT GENERAL MANAGER

ONWU PEGGY – ASSISTANT GENERAL MANAGER

ADEGBIE ADEKUNLE – ASSISTANT GENERAL MANAGER

EBENEZER-ODUWOLE OLUYINKA – ASSISTANT GENERAL MANAGER

LAWANI SALIU – ASSISTANT GENERAL MANAGER

ANAVHE EMOSHIOKEMHE – ASSISTANT GENERAL MANAGER

DIMANOCHIE NDIDI – ASSISTANT GENERAL MANAGER

CHINE SYLVALYN – ASSISTANT GENERAL MANAGER

BEN-WILLIE OSEPIRIBO – ASSISTANT GENERAL MANAGER

MEZE GEORGE – ASSISTANT GENERAL MANAGER

EBOIGBE MABEL – ASSISTANT GENERAL MANAGER

AYONMIKE UZOMA – ASSISTANT GENERAL MANAGER

ANEKE EMMANUEL – ASSISTANT GENERAL MANAGER

NTUI DONALD – ASSISTANT GENERAL MANAGER

IKEDIASHI EMMANUEL – ASSISTANT GENERAL MANAGER

OGHOGHO JULIA – ASSISTANT GENERAL MANAGER

DIKE IFEANYI – ASSISTANT GENERAL MANAGER

OMENUKWA IFEYINWA – ASSISTANT GENERAL MANAGER

OKAM OBIAKU – ASSISTANT GENERAL MANAGER

NWOKO, ANTHONY – ASSISTANT GENERAL MANAGER

AYERONWI OLAJIDE – ASSISTANT GENERAL MANAGER

NWUBA EMEKA – ASSISTANT GENERAL MANAGER

EHIRIM OKWUCHI – ASSISTANT GENERAL MANAGER

FADIPE JIMOH – ASSISTANT GENERAL MANAGER

ALAWIYE, KAFAYAT – ASSISTANT GENERAL MANAGER

ARUNA ABUBAKAR – ASSISTANT GENERAL MANAGER

OMOROJOR ETHEL – ASSISTANT GENERAL MANAGER

MOMOH RABI – ASSISTANT GENERAL MANAGER

OKEZIE CHAMBERLIN – ASSISTANT GENERAL MANAGER

BABA KABIR – ASSISTANT GENERAL MANAGER

OKAEKWU, PATRICK . – ASSISTANT GENERAL MANAGER

ABDULLAHI BASHIR . – ASSISTANT GENERAL MANAGER

AYEMOBA DAVID – ASSISTANT GENERAL MANAGER

EMELIKE OJIMADU – ASSISTANT GENERAL MANAGER

OKENWA GABRIEL – ASSISTANT GENERAL MANAGER

DIRIYAI TARINIPRE . – ASSISTANT GENERAL MANAGER

ADEWOLE CLEMENT – ASSISTANT GENERAL MANAGER

NDUBUISI, AUGUSTUS . – ASSISTANT GENERAL MANAGER

MASANAWA ABBAS – ASSISTANT GENERAL MANAGER

OKOYE ONYEKACHI – ASSISTANT GENERAL MANAGER

ONWUZURIGBO HENRY – ASSISTANT GENERAL MANAGER

OKOLO, REGINA – ASSISTANT GENERAL MANAGER

ADESOLA OLOLADE – ASSISTANT GENERAL MANAGER

ABUTU REUBEN – ASSISTANT GENERAL MANAGER

EDE UZOMA – ASSISTANT GENERAL MANAGER

ABOLADE TIMOTHY – ASSISTANT GENERAL MANAGER

OSHODE ABIODUN – ASSISTANT GENERAL MANAGER

OJUKWU ENENDU – ASSISTANT GENERAL MANAGER

OCHIAGHA OSITADINMA – ASSISTANT GENERAL MANAGER

SIMONI USMAN . – ASSISTANT GENERAL MANAGER

BELLO AISHA . – ASSISTANT GENERAL MANAGER

TANKO SAFIO – ASSISTANT GENERAL MANAGER

BELLO KOKO MOHAMMED . – ASSISTANT GENERAL MANAGER

VINCENT-ELOAGU JENNIFER – ASSISTANT GENERAL MANAGER

DABO MUHAMMED – ASSISTANT GENERAL MANAGER

UMAR SANUSI . – ASSISTANT GENERAL MANAGER

AKANDE LAWRENCE – ASSISTANT GENERAL MANAGER

ERAKEWE SAMUEL – ASSISTANT GENERAL MANAGER

OBIORAH OBIAGELI.H . – ASSISTANT GENERAL MANAGER

42.10

100.64 114.59

-

70.00

140.00

210.00

280.00

350.00

2005 2006 2007 2008

344.35


35.31

60.00

94.88

208.29

-

50.00

100.00

150.00

200.00

250.00

2005 2006 2007 2008

Gross Earnings (Group) (N'b)

9.19

15.59

25.68

56.12

-

10.00

20.00

30.00

40.00

50.00

60.00

2005 2006 2007 2008

Profit Before Tax (Group) (N'b)

7.14

11.62

18.78

51.99

-

10.00

20.00

30.00

40.00

50.00

60.00

2005 2006 2007 2008


233.04

393.31

634.49

1,185.89

-

200.00

400.00

600.00

800.00

1,000.00

1,200.00

2005 2006 2007 2008



371.01

776.03

1,271.08

2,512.13

-

500.00

1,000.00

1,500.00

2,000.00

2,500.00

3,000.00

2005 2006 2007 2008



-

300.00

600.00

900.00

1,200.00

2004 2005 2006 2007 2008

131.10

233.41

392.86

568.01

1,161.48


70.00

140.00

210.00

280.00

350.00

2004 2005 2006 2007 2008

15.67 37.79

100.40 112.83

338.48

-


500.00

1,000.00

1,500.00

2,000.00

2,500.00

2004 2005 2006 2007 2008

215.23

759.97

1,178.39

2,384.69

-

373.89


23.9334.91

58.22

89.19

190.08

-

50.00

100.00

150.00

200.00

2004 2005 2006 2007 2008


6.409.16

15.15

23.29

48.94

-

10.00

20.00

30.00

40.00

50.00

2004 2005 2006 2007 2008


5.197.16

11.49

17.51

46.52

-

10.00

20.00

30.00

40.00

50.00

2004 2005 2006 2007 2008



Outstanding Credit Perfected Security

Name Of Borrowers Acct No Relationship Approv/

To Reporting renewal Expiry Rate of Cummulative Total Payment Non Date of

Institution Date Date Interest Principal Interest Provision Made Performing Performing Total Nature Value Valuation

Visafone Comm Ltd Common All Asset

(Proparco Loan) 4020100391 Directorship 21/11/2007 20/11/2014 8 2,941,675,000.00 55,891,824.98 29,416,750.00 0.00 2,941,675,000.00 0.00 2,941,675,000.00 Debenture 18,849,256,785.60 15/2/2008

Visafone

Communications Ltd Common All Asset

(ICICI Loan) 4020100578 Directorship 21/11/2007 20/11/2014 7 800,848,922.00 14,355,374.00 8,008,489.22 0.00 800,848,922.00 0.00 800,848,922.00 Debenture As above As above

Visafone

Communication Ltd Common All Asset

(ADB Loan) 4020100667 Directorship 21/11/2007 20/11/2014 8 58,833,500.00 1,102,523.67 588,335.00 0.00 58,833,500.00 0.00 58,833,500.00 Debenture As above As above

Visafone Comm.Ltd Common All Asset

(Commerzbank Loan) 4020100675 Directorship 21/11/2007 20/11/2014 8 3,279,660,757.00 62,313,554.35 32,796,607.57 0.00 3,279,660,757.00 0.00 3,279,660,757.00 Debenture As above As above

Visafone Debenture

Communications Ltd Common on

(ICICI Loan) 4020100845 Directorship 03/07/2007 02/07/2014 8 258,154,078.00 5,765,683.00 2,581,540.78 0.00 258,154,078.00 0.00 258,154,078.00 Equipment As above As above

Visafone Common Debenture on

Communications Ltd 6010175866 Directorship 03/07/2007 02/07/2014 19 518,944.00 5,076.01 5,189.44 0.00 518,944.00 0.00 518,944.00 Equipment As above As above

Visafone Common Debenture on

Communications Ltd 8030100623 Directorship 03/07/2007 02/07/2014 0 2,061,385,364.00 0.00 20,613,853.64 0.00 2,061,385,364.00 0.00 2,061,385,364.00 Equipment As above As above

Senforce Vegetable Common Charge On

Oil Limited 6010105321 Shareholder 18/10/1993 17/10/1994 5 33,022,170.00 0.00 330,221.70 34,444,800.00 0.00 33,022,170.00 33,022,170.00 Assets/Legal N/A N/A

Mortgage

Zenith Registrars

Limited 6010146624 Subsidiary 27/06/2007 26/06/2009 19 220,000,000.00 3,540,437.16 2,200,000.00 0.00 220,000,000.00 0.00 220,000,000.00 None N/A N/A

Zenith Life Assurance

Company Limited 6010147086 Subsidiary 12/09/2007 11/09/2009 19 150,000,000.00 2,413,934.43 1,500,000.00 0.00 150,000,000.00 0.00 150,000,000.00 None N/A N/A

Zenith Securities Ltd 6010143238 Subsidiary 17/09/2007 16/09/2007 19 250,000,000.00 4,023,224.04 2,500,000.00 0.00 250,000,000.00 0.00 250,000,000.00 None N/A N/A

Cyberspace Ltd 6010113819 Associated 21/10/2007 20/10/2007 19 240,000,000.00 3,862,295.08 2,400,000.00 0.00 240,000,000.00 0.00 240,000,000.00 None N/A N/A

Company

Accion Microfinance Investee

Limited 6010161544 Company 21/12/2007 20/12/2007 19 43,182,250.00 694,927.47 431,822.50 0.00 43,182,250.00 0.00 43,182,250.00 None N/A N/A

(Under SMIEIS)